Hungary - HISTORY

Hungary - Acknowledgments

The authors wish to express their appreciation to a number of people
who assisted in the preparation of this study. Paul Marer of Indiana
University furnished his considerable expertise on the Hungarian
economy. Thanks go to Sharon Schwartz, who edited the chapters, and to
Cissie Coy, who performed the final prepublication review. The index was
prepared by Shirley Kessell. Malinda B. Neale of the Library of Congress
Composing Unit prepared the camera-ready copy under the supervision of
Peggy Pixley.

A number of members of the Federal Research Division of the Library
of Congress made significant contributions to the preparation of this
book. Special thanks are owed to Richard F. Nyrop, who supplied help and
suggestions on chapters 1 through 4, and to Sandra W. Meditz, who
reviewed Chapter 5. The authors are also grateful to Raymond E. Zickel,
who assisted in research and writing. Martha E. Hopkins ably oversaw
editing, and Marilyn Majeska managed production of the book. Elizabeth
A. Yates, Barbara Edgerton, and Izella Watson assisted on numerous
phases of manuscript preparation. Helen R. Fedor gathered and helped
select the photographs, and Walter R. Iwaskiw assembled the materials
for the maps. Invaluable graphics support was given by David P. Cabitto,
assisted by Sandra K. Ferrell (who did the cover and chapter
illustrations) and Kimberly A. Lord. Stanley M. Sciora furnished
information on the ranks and insignia of the Hungarian armed forces.

Finally, the authors wish to note the generosity of those individuals
who provided photographs for this book. All photographs are original
work not previously published.

Hungary - Preface

Since the mid-1970s, few countries in the world have experienced such
rapid and extensive change as Hungary. The political system has moved
from an authoritarian regime dominated by the Hungarian Socialist
Workers' Party (HSWP) to a multiparty republic. The HSWP itself split,
in October 1989, and most of its leaders organized a new party, the
Hungarian Socialist Party. In the late 1980s, relations with Western
countries improved dramatically, and the Hungarians also received
significant support for their reform efforts from the Soviet Union. By
contrast, until late 1989 tensions between Hungary and Romania were
rising over the latter's treatment of its Hungarian minority, but, after
the December 1989 revolution in Romania, the chances for the resolution
of that problem improved. Although sporadic efforts had been undertaken
since the late 1960s to introduce elements of a market economy into a
socialist command economy, Hungarian leaders in 1989 declared their
intention to create a full-fledged capitalist economy. The government
has also reduced the defense budget, and it has taken steps to make the
police apparatus accountable to the people and to their elected
representatives. Yet, the discontent that emerged from pressures
stemming from the economy's precipitous decline continued. This
discontent, coupled with the regime's need to widen its support to
sustain the transition from a state socialist to capitalist economy, led
the Hungarian regime to undertake political reform efforts.

These changes have necessitated a new edition of Hungary: A
Country Study, which supersedes the edition published in 1973.
Virtually everything discussed in the previous edition has been
overtaken by events. Like the earlier edition, this study attempts to
present the dominant historical, social, economic, political, and
national security aspects of Hungary. Sources of information included
books and scholarly journals, official reports of governments and
international organizations, foreign and domestic newspapers, and
numerous periodicals.

The Hungarian people are descendants of the Magyars, an Asiatic tribe
whose origins lie in what is today central Russia. The word Hungary
appears to derive from a Slavicized form of the Turkic words on ogur,
meaning "ten arrows," which may have referred to the number of
Magyar tribes. Unlike most Europeans, Hungarians do not speak an
Indo-European language. Hungarian is a member of the Finno-Ugric
language family, which also includes such languages as Estonian and
Finnish.

Hungary - History

THE HUNGARIAN PEOPLE'S REPUBLIC emerged in 1949 after the Hungarian
Workers' Party eliminated its rivals and assumed control of the state.
Soviet control of Eastern Europe after World War II had enabled a
minuscule communist party lacking popular support to gain power in the
country and gradually eliminate its political rivals. Under Matyas
Rakosi, the party consolidated its control and radically transformed the
country economically, socially, and politically.

In the mid-1950s, after the Soviet Union had somewhat relaxed its
control of Eastern Europe, Hungarian society began to mobilize against
the regime, culminating in the Revolution of 1956. Soviet troops crushed
the rebellion, leaving power in the hands of Janos Kadar. After
consolidating his authority, Kadar embarked on a program of economic
reform in the mid-1960s.

Like other countries of Eastern Europe, Hungary has a history of
class, religious, and ethnic conflicts that were intensified and
sometimes decided by the actions of larger, more powerful neighbors.
Beginning in the tenth century, German and Bohemian missionaries
converted the Magyars. In the early eleventh century, Bavarian knights
helped Stephen I eliminate rivals and quash peasant revolts. Suleyman
the Magnificent's Ottoman armies conquered and partitioned the country
with the Habsburgs in the sixteenth century, expediting the spread of
Protestant faiths. Habsburg rulers colonized Hungary with non-Magyars,
repressed its Protestants, stifled its economic development, and
attempted to Germanize its people. The Entente powers carved up Hungary
after World War I and distributed most of the land to new nation-states.
Finally, dictator Joseph Stalin enforced Soviet domination over postwar
Hungary.

Despite internal divisions, strong foreign influence, and outright
attempts to force the Hungarians to assimilate into other cultures,
Hungarian nationalism has thrived throughout the nineteenth and
twentieth centuries. Nationalism drove Hungary to ally itself with Nazi
Germany to regain territories lost after World War I. Nationalism also
inspired Hungarians to revolt against the Stalinist political order in
October 1956.

Hungary - EARLY HISTORY

The Hungarian nation traces its history to the Magyars, a pagan
Finno-Ugric tribe that arose in central Russia and spoke a language that
evolved into modern Hungarian. Historians dispute the exact location of
the early Magyars' original homeland, but it is likely to be an area
between the Volga River and the Ural Mountains. In ancient times, the
Magyars probably lived as nomadic tent-dwelling hunters and fishers.
Some scholars argue that they engaged in agriculture beginning in the
second millennium B.C.

Before the fifth century A.D., the Magyars' ancestors gradually
migrated southward onto the Russian steppes, where they wandered into
the lands near the Volga River bend, at present-day Kazan, as nomadic
herders. Later, probably under pressure from hostile tribes to the east,
they migrated to the area between the Don and lower Dnepr rivers. There
they lived close to, and perhaps were dominated by, the Bulgar-Turks
from about the fifth to the seventh century. During this period, the
Magyars became a semisedentary people who lived by raising cattle and
sheep, planting crops, and fishing. The Bulgar-Turkish influence on the
Magyars was significant, especially in agriculture. Most Hungarian words
dealing with agriculture and animal husbandry have Turkic roots. By
contrast, the etymology of the word Hungary has been traced to
a Slavicized form of the Turkic words on ogur, meaning
"ten arrows," which may have referred to the number of Magyar
tribes.

The Magyars lived on lands controlled by the Khazars (a Turkish
people whose realm stretched from the lower Volga and the lower Don
rivers to the Caucasus) from about the seventh to the ninth century,
when they freed themselves from Khazar rule. The Khazars attempted to
reconquer the Magyars both by themselves and with the help of the
Pechenegs, another Turkish tribe. This tribe drove the Magyars from
their homes westward to lands between the Dnepr and lower Danube rivers
in 889. In 895 the Magyars joined Byzantine armies under Emperor Leo VI
in a war against the Bulgars. However, the Bulgars emerged victorious.
Their allies, the Pechenegs, attacked the weakened Magyars and forced
them westward yet again in 895 or 896. This migration took the Magyars
over the Carpathian Mountains and into the basin drained by the Danube
and Tisza rivers, a region that corresponds roughly to present-day
Hungary. Romans, Goths, Huns, Slavs, and other peoples had previously
occupied the region, but at the time of the Magyar migration, the land
was inhabited only by a sparse population of Slavs, numbering about
200,000.

Tradition holds that the Magyar clan chiefs chose a chieftain named
Árpad to lead the migration and that they swore by sipping from a cup
of their commingled blood to accept Árpad's male descendants as the
Magyars' hereditary chieftains. The Magyars probably knew of the lands
in the Carpathian Basin because from 892 to 894 Magyar mercenaries had
fought there for King Arnulph of East Francia in a struggle with the
duke of Moravia. Estimates are that about 400,000 people made up the
exodus, in seven Magyar, one Kabar, and other smaller tribes.

The Carpathian Basin and parts of Transylvania southsouthwest of the
basin had been settled for thousands of years before the Magyars'
arrival. A rich Bronze Age culture thrived there until horsemen from the
steppes destroyed it in the middle of the thirteenth century B.C. Celts
later occupied parts of the land, and in the first century A.D. the
Romans conquered and divided it between the imperial provinces of
Pannonia and Dacia. In the fourth century, the Goths ousted the Romans,
and Attila the Hun later made the Carpathian Basin the hub of his
short-lived empire. Thereafter, Avars, Bulgars, Germans, and Slavs
settled the region. In the late ninth century A.D., only scattered
settlements of Slavs occupied the Carpathian Basin. The Magyar forces,
light cavalrymen who used Central Asian-style bows, quickly conquered
the Slavs, whom they either assimilated or enslaved.

Romanian and Hungarian historians disagree about the ethnicity of
Transylvania's population before the Magyars' arrival. The Romanians
establish their claims to Transylvania by arguing that their Latin
ancestors inhabited Transylvania and survived there through the Dark
Ages. The Hungarians, by contrast, maintain that Transylvania was
inhabited not by the ancestors of the Romanians but by Slavs and point
out that the first mention of the Romanians' ancestors in Hungarian
records, which appeared in the thirteenth century, described them as
drifting herders.

Hungary - MEDIEVAL PERIOD

In the four centuries after their migration into the Carpathian
Basin, the Magyars gradually developed from a loose confederation of
pagan marauders into a recognized kingdom. This kingdom, which became
known as Hungary, was led by the Árpad Dynsaty and was firmly allied to
the Christian West. Eventually the Árpad line died out, however, and
Hungary again descended into anarchy, with the most powerful nobels
vying for control.

Christianization of the Magyars

The bonds linking the seven Magyar tribes grew frail soon after the
migration into the Carpathian Basin. At that time, Europe was weak and
disunited, and for more than half a century Magyar bands raided Bavaria,
Moravia, Italy, Constantinople, and lands as far away as the Pyrenees.
Sometimes fighting as mercenaries and sometimes lured by spoils alone,
the Magyar bands looted towns and took captives for labor, ransom, or
sale on the slave market. The Byzantine emperor and European princes
paid the Magyars annual tribute. In 955, however, German and Czech
armies under the Holy Roman Empire's King Otto I destroyed a Magyar
force near Augsburg. The defeat effectively ended Magyar raids on the
West, and in 970 the Byzantines halted Magyar incursions toward the
East.

Fearing a war of extermination, Chieftain Geza (972-97), Árpad's
great-grandson, assured Otto II that the Magyars had ceased their raids
and asked him to send missionaries. Otto complied, and in 975 Geza and a
few of his kinsmen were baptized into the Roman Catholic Church. Geza
consented to baptism more out of political necessity than conviction. He
continued to offer sacrifices to the pagan gods and reportedly bragged
that he "was rich enough for two gods." From this time,
however, missionaries began the gradual process of converting and
simultaneously westernizing the Magyar tribes. Geza used German knights
and his position as chief of the Magyars' largest clan to restore strong
central authority over the other clans. Hungary's ties with the West
were strengthened in 996 when Geza's son, Stephen, who was baptized as a
child and educated by Saint Adalbert of Prague, married Gisela, a
Bavarian princess and sister of Emperor Henry II.

Hungary - Stephen I

Stephen (997-1038) became chieftain when Geza died, and he
consolidated his rule by ousting rival clan chiefs and confiscating
their lands. Stephen then asked Pope Sylvester II to recognize him as
king of Hungary. The pope agreed, and legend says Stephen was crowned on
Christmas Day in the year 1000. The crowning legitimized Hungary as a
Western kingdom independent of the Holy Roman and Byzantine empires. It
also gave Stephen virtually absolute power, which he used to strengthen
the Roman Catholic Church and Hungary. Stephen ordered the people to pay
tithes and required every tenth village to construct a church and
support a priest. Stephen donated land to support bishoprics and
monasteries, required all persons except the clergy to marry, and barred
marriages between Christians and pagans. Foreign monks worked as
teachers and introduced Western agricultural methods. A Latin alphabet
was devised for the Magyar (Hungarian) language.

Stephen administered his kingdom through a system of counties, each
governed by an ispan, or magistrate, appointed by the king. In
Stephen's time, Magyar society had two classes: the freemen nobles and
the unfree. The nobles were descended in the male line from the Magyars
who had either migrated into the Carpathian Basin or had received their
title of nobility from the king. Only nobles could hold office or
present grievances to the king. They paid tithes and owed the crown
military service but were exempt from taxes. The unfree--who had no
political voice--were slaves, freed slaves, immigrants, or nobles
stripped of their privileges. Most were serfs who paid taxes to the king
and a part of each harvest to their lord for use of his land. The king
had direct control of the unfree, thus checking the nobles' power.

Clan lands, crown lands, and former crown lands made up the realm.
Clan lands belonged to nobles, who could will the lands to family
members or the church; if a noble died without an heir, his land
reverted to his clan. Crown lands consisted of Stephen's patrimony,
lands seized from disloyal nobles, conquered lands, and unoccupied parts
of the kingdom. Former crown lands were properties granted by the king
to the church or to individuals.

Hungary - Politics and Society under Stephen's Successors

Stephen died in 1038 and was canonized in 1083. Despite pagan revolts
and a series of succession struggles after his death, Hungary grew
stronger and expanded. Transylvania was conquered and colonized with Magyars, Szekels
(a tribe related to the Magyars), and German Saxons in the eleventh and
twelfth centuries. In 1090 Laszlo I (1077-95) occupied Slavonia, and in
1103 Kalman I (1095-1116) assumed the title of king of Croatia. Croatia
was never assimilated into Hungary; rather, it became an associate
kingdom administered by a ban, or civil governor.

The eleventh and twelfth centuries were relatively peaceful, and
Hungary slowly developed a feudal economy. Crop production gradually
supplemented stock breeding, but until the twelfth century planting
methods remained crude because tillers farmed each plot until it was
exhausted, then moved on to fresh land. Gold, silver, and salt mining
boosted the king's revenues. Despite the minting of coins, cattle
remained the principal medium of exchange. Towns began developing when
an improvement in agricultural methods and the clearing of additional
land produced enough surplus to support a class of full-time craftsmen.
By the reign of Bela III (1173-96), Hungary was one of the leading
powers in southeastern Europe, and in the thirteenth century Hungary's
nobles were trading gold, silver, copper, and iron with western Europe
for luxury goods.

Until the end of the twelfth century, the king's power remained
paramount in Hungary. He was the largest landowner, and income from the
crown lands nearly equaled the revenues generated from mines, customs,
tolls, and the mint. In the thirteenth century, however, the social
structure changed, and the crown's absolute power began to wane. As the
crown lands became a less important source of royal revenues, the king
found it expedient to make land grants to nobles to ensure their
loyalty. King Andrew II (1205-35), a profligate spender on foreign
military adventures and domestic luxury, made huge land grants to nobles
who fought for him. These nobles, many of whom were foreign knights,
soon made up a class of magnates whose wealth and power far outstripped
that of the more numerous, and predominantly Magyar, lesser nobles. When
Andrew tried to meet burgeoning expenses by raising the serfs' taxes,
thereby indirectly slashing the lesser nobles' incomes, the lesser
nobles rebelled. In 1222 they forced Andrew to sign the Golden Bull,
which limited the king's power, declared the lesser nobles (all free men
not included among the great Barons or magnates) legally equal to the
magnates and gave them the right to resist the king's illegal acts. The
lesser nobles also began to present Andrew with grievances, a practice
that evolved into the institution of the parliament, or Diet.

Andrew II's son Bela IV (1235-79) tried with little success to
reestablish royal preeminence by reacquiring lost crown lands. His
efforts, however, created a deep rift between the crown and the magnates
just as the Mongols were sweeping westward across Russia toward Europe.
Aware of the danger, Bela ordered the magnates and lesser nobles to
mobilize. Few responded, and the Mongols routed Bela's army at Mohi on
April 11, 1241. Bela fled first to Austria, where Duke Frederick of
Babenberg held him for ransom, then to Dalmatia. The Mongols reduced
Hungary's towns and villages to ashes and slaughtered half the
population before news arrived in 1242 that the Great Khan Ogotai had
died in Karakorum. The Mongols withdrew, sparing Bela and what remained
of his kingdom.

Hungary - King Bela and Reconstruction

Bela realized that reconstruction would require the magnates'
support, so he abandoned his attempts to recover former crown lands.
Instead, he granted crown lands to his supporters, reorganized the army
by replacing light archers with heavy cavalry, and granted the magnates
concessions to redevelop their lands and construct stone-and-mortar
castles that would withstand enemy sieges. Bela repopulated the country
with a wave of immigrants, transforming royal castles into towns and
populating them with Germans, Italians, and Jews. Mining began anew,
farming methods improved, and crafts and commerce developed in the
towns. After Bela's reconstruction program, the magnates, with their new
fortifications, emerged as Hungary's most powerful political force.
However, by the end of the thirteenth century, they were fighting each
other and carving out petty principalities.

King Bela IV died in 1270, and the Árpad line expired in 1301 when
Andrew III, who strove with some success to limit the magnates' power,
unexpectedly died without a male heir. Anarchy characterized Hungary as
factions of magnates vied for control.

Hungary - RENAISSANCE AND REFORMATION

After the Árpad Dynasty ended, Hungary's nobles chose a series of
foreign kings who reestablished strong royal authority. Hungary and the
adjacent countries prospered for several centuries as Central Europe
experienced an era of peace interrupted only by succession struggles.
But over time, the onslaughts of the Turks and the strife of the
Reformation weakened Hungary, and the country was eventually partitioned
by the Turks and the Habsburgs.
Golden Era

Hungary's first two foreign kings, Charles Robert and Louis I of the
House of Anjou, ruled during one of the most glorious periods in the
country's history. Central Europe was at peace, and Hungary and its
neighbors prospered. Charles Robert (1308-42) won the protracted
succession struggle after Andrew III's death. An Árpad descendant in
the female line, Charles Robert was crowned as a child and raised in
Hungary. He reestablished the crown's authority by ousting disloyal
magnates and distributing their estates to his supporters. Charles
Robert then ordered the magnates to recruit and equip small private
armies called banderia. Charles Robert ruled by decree and
convened the Diet only to announce his decisions. Dynastic marriages
linked his family with the ruling families of Naples and Poland and
heightened Hungary's standing abroad. Under Charles Robert, the crown
regained control of Hungary's mines, and in the next two centuries the
mines produced more than a third of Europe's gold and a quarter of its
silver. Charles Robert also introduced tax reforms and a stable
currency. Charles Robert's son and successor Louis I (1342-82)
maintained the strong central authority Charles Robert had amassed. In
1351 Louis issued a decree that reconfirmed the Golden Bull, erased all
legal distinctions between the lesser nobles and the magnates,
standardized the serfs' obligations, and barred the serfs from leaving
the lesser nobles' farms to seek better opportunities on the magnates'
estates. The decree also established the entail
system. Hungary's economy continued to flourish
during Louis's reign. Gold and other precious metals poured from the
country's mines and enriched the royal treasury, foreign trade
increased, new towns and villages arose, and craftsmen formed guilds.
The prosperity fueled a surge in cultural activity, and Louis promoted
the illumination of manuscripts and in 1367 founded Hungary's first
university. Abroad, however, Louis fought several costly wars and wasted
time, funds, and lives in failed attempts to gain for his nephew the
throne of Naples. While Louis was engaged in these activates, the Turks
made their initial inroads into the Balkans. Louis became king of Poland
in 1370 and ruled the two countries for twelve years.

Sigismund (1387-37), Louis's son-in-law, won a bitter struggle for
the throne after Louis died in 1382. Under Sigismund, Hungary's fortunes
began to decline. Many Hungarian nobles despised Sigismund for his
cruelty during the succession struggle, his long absences, and his
costly foreign wars. In 1401 disgruntled nobles temporarily imprisoned
the king. In 1403 another group crowned an anti-king, who failed to
solidify his power but succeeded in selling Dalmatia to Venice.
Sigismund failed to reclaim the territory. Sigismund became the Holy
Roman Emperor in 1410 and king of Bohemia in 1419, thus requiring him to
spend long periods abroad and enabling Hungary's magnates to acquire
unprecedented power. In response, Sigismund created the office of palatine
to rule the country in his stead. Like earlier Hungarian
kings, Sigismund elevated his supporters to magnate status and sold off
crown lands to meet burgeoning expenses. Although Hungary's economy
continued to flourish, Sigismund's expenses outstripped his income. He
bolstered royal revenues by increasing the serfs' taxes and requiring
cash payment. Social turmoil erupted late in Sigismund's reign as a
result of the heavier taxes and renewed magnate pressure on the lesser
nobles. Hungary's first peasant revolt erupted when a Transylvanian
bishop ordered peasants to pay tithes in coin rather than in kind. The
revolt was quickly checked, but it prompted Transylvania's Szekel,
Magyar, and German nobles to form the Union of Three Nations, which was
an effort to defend their privileges against any power except that of
the king.

Additional turmoil erupted when the Ottoman Turks expanded their
empire into the Balkans. They crossed the Bosporus Straits in 1352,
subdued Bulgaria in 1388, and defeated the Serbs at Kosovo Polje in
1389. Sigismund led a crusade against them in 1396, but the Ottomans
routed his forces at Nicopolis, and he barely escaped with his life.
Tamerlane's invasion of Anatolia in 1402-03 slowed the Turks' progress
for several decades, but in 1437 Sultan Murad prepared to invade
Hungary. Sigismund died the same year, and Hungary's next two kings,
Albrecht V of Austria (1437-39) and Wladyslaw III of Poland (1439-44),
who was known in Hungary as Ulaszlo I, both died during campaigns
against the Turks.

After Ulaszlo, Hungary's nobles chose an infant king, Laszlo V, and a
regent, Janos Hunyadi, to rule the country until Laszlo V came of age.
The son of a lesser nobleman of the Vlach tribe, Hunyadi rose to become
a general, Transylvania's military governor, one of Hungary's largest
landowners, and a war hero. He used his personal wealth and the support
of the lesser nobles to win the regency and overcome the opposition of
the magnates. Hunyadi then established a mercenary army funded by the
first tax ever imposed on Hungary's nobles. He defeated the Ottoman
forces in Transylvania in 1442 and broke their hold on Serbia in 1443,
only to be routed at Varna (where Laszlo V himself perished) a year
later. In 1456, when the Turkish army besieged Belgrade, Hunyadi
defeated it in his greatest and final victory. Hunyadi died of the
plague soon after.

Some magnates resented Hunyadi for his popularity as well as for the
taxes he imposed, and they feared that his sons might seize the throne
from Laszlo. They coaxed the sons to return to Laszlo's court, where
Hunyadi's elder son was beheaded. His younger son, Matyas, was
imprisoned in Bohemia. However, lesser nobles loyal to Matyas soon
expelled Laszlo. After Laszlo's death abroad, they paid ransom for
Matyas, met him on the frozen Danube River, and proclaimed him king.
Known as Matyas Corvinus (1458-90), he was, with one possible exception
(Janos Zapolyai), the last Hungarian king to rule the country.

Although Matyas regularly convened the Diet and expanded the lesser
nobles' powers in the counties, he exercised absolute rule over Hungary
by means of a secular bureaucracy. Matyas enlisted 30,000 foreign
mercenaries in his standing army and built a network of fortresses along
Hungary's southern frontier, but he did not pursue his father's
aggressive anti-Turkish policy. Instead, Matyas launched unpopular
attacks on Bohemia, Poland, and Austria, pursuing an ambition to become
Holy Roman Emperor and arguing that he was trying to forge a unified
Western alliance strong enough to expel the Turks from Europe. He
eliminated tax exemptions and raised the serfs' obligations to the crown
to fund his court and the military. The magnates complained that these
measures reduced their incomes, but despite the stiffer obligations, the
serfs considered Matyas a just ruler because he protected them from
excessive demands and other abuses by the magnates. He also reformed
Hungary's legal system and promoted the growth of Hungary's towns.
Matyas was a true renaissance man and made his court a center of
humanist culture; under his rule, Hungary's first books were printed and
its second university was established. Matyas' library, the Corvina, was
famous throughout Europe. In his quest for the imperial throne, Matyas
eventually moved to Vienna, where he died in 1490.

Hungary - Reign of Ulaszlo II and Louis II

Matyas's reforms did not survive the turbulent decades that followed
his reign. An oligarchy of quarrelsome magnates gained control of
Hungary. They crowned a docile king, Vladislav Jagiello (the
Jagiellonian king of Bohemia, who was known in Hungary as Ulaszlo II,
1490-1516), only on condition that he abolish the taxes that had
supported Matyas's mercenary army. As a result, the king's army
dispersed just as the Turks were threatening Hungary. The magnates also
dismantled Matyas's administration and antagonized the lesser nobles. In
1492 the Diet limited the serfs' freedom of movement and expanded their
obligations. Rural discontent boiled over in 1514 when well-armed
peasants (if they are in rebellion they are not really acting as serfs)
under Gyorgy Dozsa rose up and attacked estates across Hungary. United
by a common threat, the magnates and lesser nobles eventually crushed
the rebels. Dozsa and other rebel leaders were executed in a most brutal
manner.

Shocked by the peasant revolt, the Diet of 1514 passed laws that
condemned the serfs to eternal bondage and increased their work
obligations. Corporal punishment became widespread, and one noble even
branded his serfs like livestock. The legal scholar Stephen Werboczy
included the new laws in his Tripartitum of 1514, which made up
Hungary's legal corpus until the revolution of 1848. The Tripartitum
gave Hungary's king and nobles, or magnates, equal shares of power: the
nobles recognized the king as superior, but in turn the nobles had the
power to elect the king. The Tripartitum also freed the nobles from
taxation, obligated them to serve in the military only in a defensive
war, and made them immune from arbitrary arrest. The new laws weakened
Hungary by deepening the rift between the nobles and the peasantry just
as the Turks prepared to invade the country.

When Ulaszlo II died in 1516, his ten-year-old son Louis II (1516-26)
became king, but a royal council appointed by the Diet ruled the
country. Hungary was in a state of near anarchy under the magnates'
rule. The king's finances were a shambles; he borrowed to meet his
household expenses despite the fact that they totaled about one-third of
the national income. The country's defenses sagged as border guards went
unpaid, fortresses fell into disrepair, and initiatives to increase
taxes to reinforce defenses were stifled. In 1521 Sultan Suleyman the
Magnificent recognized Hungary's weakness and seized Belgrade in
preparation for an attack on Hungary. In August 1526, he marched more
than 100,000 troops into Hungary's heartland, and at Mohacs they cut
down all but several hundred of the 25,000 ill-equipped soldiers whom
Louis II had been able to muster for the country's defense. Louis
himself died, thrown from a horse into a bog.

After Louis's death, rival factions of Hungarian nobles
simultaneously elected two kings, Janos Zapolyai (1526-40) and Ferdinand
(1526-64). Each claimed sovereignty over the entire country but lacked
sufficient forces to eliminate his rival. Zapolyai, a Hungarian and the
military governor of Transylvania, was recognized by the sultan and was
supported mostly by lesser nobles opposed to new foreign kings.
Ferdinand, the first Habsburg to occupy the Hungarian throne, drew
support from magnates in western Hungary who hoped he could convince his
brother, Holy Roman Emperor Charles V, to expel the Turks. In 1538
George Martinuzzi, Zapolyai's adviser, arranged a treaty between the
rivals that would have made Ferdinand sole monarch upon the death of the
then-childless Zapolyai. The deal collapsed when Zapolyai married and
fathered a son. Violence erupted, and the Turks seized the opportunity,
conquering the city of Buda and then partitioning the country in 1541.

Hungary - Partition of Hungary

The partition of Hungary between the Ottoman and Habsburg empires
lasted more than 150 years. Habsburg Austria controlled Royal Hungary,
which consisted of counties along the Austrian border and some of
northwestern Croatia. The Ottomans annexed central and southern Hungary.
Transylvania became an Ottoman vassal state, where native princes, who
paid the Turks tribute, ruled with considerable autonomy. After the
Hungarian defeat at Mohacs, the Protestant Reformation took hold in
Hungary. Initially, German burghers in Transylvania and Royal Hungary
adopted Lutheranism; later, John Calvin's works converted many Magyars
in Transylvania and central Hungary. The Reformation spread quickly, and
by the early seventeenth century hardly any noble families remained
Catholic. Archbishop Peter Pazmany reorganized Royal Hungary's Roman
Catholic Church and led a Counter-Reformation that reversed the
Protestants' gains in Royal Hungary, using persuasion rather than
intimidation. Transylvania, however, remained a Protestant stronghold.
The Reformation caused rifts between Catholic Magyars, who often sided
with the Habsburgs, and Protestant Magyars, who developed a strong
national identity and became rebels in Austrian eyes. Chasms also
developed between Royal Hungary and Transylvania and between the mostly
Catholic magnates and the mainly Protestant lesser nobles.

Hungary - Royal Hungary

Royal Hungary became a small part of the Habsburg Empire and enjoyed
little influence in Vienna. The Habsburg king directly controlled Royal
Hungary's financial, military, and foreign affairs, and imperial troops
guarded its borders. The Habsburgs avoided filling the office of
palatine to prevent the holder's amassing too much power. In addition,
the so-called Turkish question divided the Habsburgs and the Hungarians:
Vienna wanted to maintain peace with the Turks; the Hungarians wanted
the Ottomans ousted. As the Hungarians recognized the weakness of their
position, many became anti-Habsburg. They complained about foreign rule,
the behavior of foreign garrisons, and the Habsburgs' recognition of
Turkish sovereignty in Transylvania. Protestants, who were persecuted in
Royal Hungary, considered the Counter-Reformation a greater menace than
the Turks, however.

Hungary - Ottoman Hungary

Central Hungary became a province of the Ottoman Empire ruled by
pashas living in Buda. The Turks' only interest was to secure their hold
on the territory. The Sublime Porte (a term used to designate the
Ottoman rulers) became the sole landowner and managed about 20 percent
of the land for its own benefit, apportioning the rest among soldiers
and civil servants. The new landlords were interested mainly in
squeezing as much wealth from the land as quickly as possible. Wars,
slave-taking, and the emigration of nobles who lost their land
depopulated much of the countryside. However, the Turks practiced
religious tolerance and allowed the Hungarians living within the empire
significant autonomy in internal affairs. Towns maintained some
selfgovernment , and a prosperous middle class developed through
artisanry and trade.

Hungary - Transylvania

Transylvania, an Ottoman vassal state, functioned for many years as
an independent country. In 1542 Martinuzzi revived the 1437 Union of
Three Nations to govern the land, and the Transylvanian nobles regularly
met in their own Diet. In 1572 the Diet created freedom of worship and
equal political rights for members of Transylvania's four
"established" religions: Roman Catholic, Lutheran, Unitarian,
and Calvinist. The Eastern Orthodox Romanian serfs were permitted to
worship, but the Orthodox Church was not recognized as an
"established" religion, and the Romanians did not share
political equality.

In 1591 the Habsburgs invaded Transylvania under George Basta, who
persecuted Protestants and expropriated estates illegally until Istvan
Bocskay, a former Habsburg supporter, mustered an army that expelled
Basta's forces in 1604-05. In 1606 Bocskay concluded the Peace of Vienna
with the Habsburgs and the Peace of Zsitvatorok with the Turks. The
treaties secured his position as prince of Transylvania, guaranteed
rights for Royal Hungary's Protestants, broadened Transylvania's
independence, and freed the emperor of his obligation to pay tribute to
the Ottomans. After Bocskay's death, the Ottomans compelled the
Transylvanians to accept Gabor Bethlen as prince. Transylvania prospered
under Bethlen's enlightened despotism. He stimulated agriculture, trade,
and industry; sank new mines; sent students to Protestant universities
abroad; and prohibited landlords from barring children of serfs from an
education. Unfortunately, when Bethlen died in 1629, the Transylvanian
Diet abolished most of his reforms. After a short succession struggle,
Gyorgy Rakoczi I (1648-60) became prince. Under Rakoczi, Transylvania
fought with the Protestants in the Thirty Years' War (1618-48) and was
mentioned as a sovereign state in the Peace of Westphalia.
Transylvania's golden age ended after Gyorgy Rakoczi II (1648-60)
launched an attack on Poland without the prior approval of the Ottomans
or Transylvania's Diet. The campaign was a disaster, and the Turks used
the opportunity to rout Rakoczi's army and take control of Transylvania.

Hungary - End of the Partition

The Ottoman Empire gradually weakened after Suleyman's death in 1559.
Soon, the Ottoman occupation of Hungary continued not so much because of
the Turk strength but because of the West's disunity and lack of
resolve. Hungarian nobles grew impatient with the Habsburgs' persecution
of Protestants and reluctance to take steps to drive out the Turks.
Their discontent exploded after the Habsburg imperial army routed a
Turkish force at St. Gotthard in 1664. Instead of pressing for
concessions, Emperor Leopold I (1657-1705) concluded the Treaty of
Vasvar in which he conceded to the Turks more Hungarian territory than
they had ever possessed. After Vasvar, even many Catholic magnates
turned against the Habsburgs.

After a failed Hungarian plot to throw off Habsburg rule, Leopold
suppressed the Hungarian constitution, subjected Royal Hungary to direct
absolute rule from Vienna, and harshly repressed Hungarian Protestants,
handing over Protestant ministers who refused to deny their faith to
work as galley slaves. Hungarian discontent deepened. In 1681 Imre
Thokoly, a Transylvanian nobleman, led a rebellion against the Habsburgs
and forced Leopold I to convoke the Diet and restore Hungary's
constitution and the office of palatine. Sensing weakness, the Turks
made their strike against Austria, but Polish forces routed them near
Vienna in 1683. A Western campaign then gradually drove the Turks from
Hungary, and the sultan surrendered almost all of his Hungarian and
Croatian possessions in the Peace of Karlowitz in 1699.

Hungary - THE HABSBURGS

The Habsburgs ruled autocratically on almost all questions except
taxation and relegated Hungary to the status of a colony, a factor that,
together with other factors, stifled economic development. After more
than a century of stagnation, the lesser nobles, under increasing
economic pressure and prompted by nascent Hungarian nationalism, pressed
for reform. The crescendo of discontent climaxed in the March 1948
revolution. Russian troops quashed the rebellion, enabling Austrian
emperor Franz Joseph to impose absolute control for almost two decades.

Hungary - Reign of Leopold II

As the Habsburgs gained control of the country, the ministers of
Leopold I argued that he should rule Hungary as conquered territory. One
even said Vienna should first make the Hungarians beggars, then
Catholics, and then Germans. At the Diet of Pressburg in 1687, the
emperor promised to observe all of Hungary's laws and privileges.
Hereditary succession of the Habsburgs was recognized, however, and the
nobles' right of resistance was abrogated. In 1690 Leopold began
redistributing lands freed from the Turks. Protestant nobles and all
other Hungarians thought disloyal by the Habsburgs lost their estates,
which were given to foreigners. Vienna controlled Hungary's foreign
affairs, defense, tariffs, and other functions, and it separated
Tranyslvania from Hungary, treating it as a separate imperial territory.

The repression of Protestants and the land seizures embittered the
Hungarians, and in 1703 a peasant uprising sparked an eight-year
national rebellion aimed at casting off the Habsburg yoke. Disgruntled
Protestants, peasants, and soldiers united under Ferenc Rakoczi, a Roman
Catholic magnate who could hardly speak Hungarian. Most of Hungary soon
supported Rakoczi, and the joint Hungarian-Transylvanian Diet voted to
annul the Habsburgs' right to the throne. Fortunes turned against the
rebels, however, when the Habsburgs made peace in the West and turned
their full force against Hungary. The rebellion ended in 1711, when
moderate rebel leaders concluded the Treaty of Szatmar, in which the
Hungarians gained little except the emperor's agreement to reconvene the
Diet and to grant an amnesty for the rebels.

Hungary - Reign of Charles VI and Maria Theresa

Leopold's successor, Charles VI (1711-40), began building a workable
relationship with Hungary after the Treaty of Szatmar. Charles needed
the Hungarian Diet's approval for the Pragmatic Sanction, under which
the Habsburg monarch was to rule Hungary not as emperor but as a king
subject to the restraints of Hungary's constitution and laws. He hoped
that the Pragmatic Sanction would keep the Habsburg Empire intact if his
daughter, Maria Theresa, succeeded him. The Diet approved the Pragmatic
Sanction in 1723, and Hungary thus agreed to became a hereditary
monarchy under the Habsburgs for as long as their dynasty existed. In
practice, however, Charles and his successors governed almost
autocratically, controlling Hungary's foreign affairs, defense, and
finance but lacking the power to tax the nobles without their approval.
The Habsburgs also maintained Transylvania's separation from Hungary.

Charles organized Hungary's first modern, centralized administration
and in 1715 established a standing army under his command, which was
entirely funded and manned by the nonnoble population. This policy
reduced the nobles' military obligation without abrogating their
exemption from taxation. Charles also banned conversion to
Protestantism, required civil servants to profess Catholicism, and
forbade Protestant students to study abroad.

Maria Theresa (1740-80) faced an immediate challenge from Prussia's
Frederick II when she became head of the House of Habsburg. In 1741 she
appeared before the Hungarian Diet holding her newborn son and entreated
Hungary's nobles to support her. They stood behind her and helped secure
her rule. Maria Theresa later took measures to reinforce links with
Hungary's magnates. She established special schools to attract Hungarian
nobles to Vienna. During her reign, the members of the magnate class
lost their Hungarian national identity, including their knowledge of the
Hungarian language.

Under Charles and Maria Theresa, Hungary experienced further economic
decline. Centuries of Ottoman occupation, rebellion, and war had reduced
Hungary's population drastically, and large parts of the country's
southern half were almost deserted. A labor shortage developed as
landowners restored their estates. In response, the Habsburgs began to
colonize Hungary with large numbers of peasants from all over Europe,
especially Slovaks, Serbs, Croatians, and Germans. Many Jews also
immigrated from Vienna and the empire's Polish lands near the end of the
century. Hungary's population more than tripled to 8 million between
1720 and 1787. However, only 39 percent of its people were Magyars, who
lived mainly in the center of the country.

A complex patchwork of minority peoples emerged in the lands along
Hungary's periphery. Droves of Romanians entered Transylvania during the
same period. The Protestant and Catholic Hungarians and Germans who had
been there for years had considered the Orthodox Romanians inferior and
relegated them to serfdom. In the eighteenth century, leaders of the
Orthodox Church began arguing that Romanians were descendants of the
Roman Dacians and thus Transylvania's original inhabitants. The Orthodox
leaders demanded, without success, that the Romanians be recognized as
Transylvania's fourth "nation" and the Orthodox Church as its
fifth "established" religion.

In the early to mid-eighteenth century, Hungary had a primitive
agricultural economy that employed 90 percent of the population. The
nobles failed to use fertilizers, roads were poor and rivers blocked,
and crude storage methods caused huge losses of grain. Barter had
replaced money transactions, and little trade existed between towns and
the serfs. After 1760 a labor surplus developed. The serf population
grew, pressure on the land increased, and the serfs' standard of living
declined. Landowners began making greater demands on new tenants and
began violating existing agreements. In response, Maria Theresa issued
her Urbarium of 1767 to protect the serfs by restoring their freedom of
movement and limiting the corvee. Despite her efforts and several
periods of strong demand for grain, the situation worsened. Between 1767
and 1848, many serfs left their holdings. Most became landless farm
workers because a lack of industrial development meant few opportunities
for work in the towns.

Hungary - Enlightened Absolutism

Joseph II (1780-90), a dynamic leader strongly influenced by the
Enlightenment, shook Hungary from its malaise when he inherited the
throne from his mother, Maria Theresa. Joseph sought to centralize
control of the empire and to rule it by decree as an enlightened despot.
He refused to take the Hungarian coronation oath to avoid being
constrained by Hungary's constitution. In 1781 Joseph issued the Patent
of Toleration, which granted Protestants and Orthodox Christians full
civil rights and Jews freedom of worship. He decreed that German replace
Latin as the empire's official language and granted the peasants the
freedom to leave their holdings, to marry, and to place their children
in trades. Hungary, Croatia, and Transylvania became a single imperial
territory under one administration. When the Hungarian nobles again
refused to waive their exemption from taxation, Joseph banned imports of
Hungarian manufactured goods into Austria and began a survey to prepare
for imposition of a general land tax.

Joseph's reforms outraged Hungary's nobles and clergy, and the
country's peasants grew dissatisfied with taxes, conscription, and
requisitions of supplies. Hungarians perceived Joseph's language reform
as German cultural hegemony, and they reacted by insisting on the right
to use their own tongue. As a result, Hungarian lesser nobles sparked a
renaissance of the Magyar language and culture, and a cult of national
dance and costume flourished. The lesser nobles questioned the loyalty
of the magnates, of whom less than half were ethnic Magyars, and even
those had become French- and German-speaking courtiers. The Magyar
national reawakening subsequently triggered national revivals among the
Slovak, Romanian, Serbian, and Croatian minorities within Hungary and
Transylvania, who felt threatened by both German and Magyar cultural
hegemony. These national revivals later blossomed into the nationalist
movements of the nineteenth and twentieth centuries that contributed to
the empire's ultimate collapse.

Late in his reign, Joseph led a costly, ill-fated campaign against
the Turks that weakened his empire. On January 28, 1790, three weeks
before his death, the emperor issued a decree canceling all of his
reforms except the Patent of Toleration, peasant reforms, and abolition
of the religious orders.

Joseph's successor, Leopold II (1790-92), recognized Hungary again as
a separate country under a Habsburg king and reestablished Croatia and
Transylvania as separate territorial entities. In 1791 the Diet passed
Law X, which stressed Hungary's status as an independent kingdom ruled
only by a king legally crowned according to Hungarian laws. Law X later
became the basis for demands by Hungarian reformers for statehood in the
period from 1825 to 1849. New laws again required approval of both the
Habsburg king and the Diet, and Latin was restored as the official
language. The peasant reforms remained in effect, however, and
Protestants remained equal before the law. Leopold died in March 1792
just as the French Revolution was about to degenerate into the Reign of
Terror and send shock waves through the royal houses of Europe.

Enlightened absolutism ended in Hungary under Leopold's successor,
Francis I (1792-1835), who developed an almost abnormal aversion to
change, bringing Hungary decades of political stagnation. In 1795 the
Hungarian police arrested an abbot and several of the country's leading
thinkers for plotting a Jacobin kind of revolution to install a radical
democratic, egalitarian political system in Hungary. Thereafter, Francis
resolved to extinguish any spark of reform that might ignite revolution.
The execution of the alleged plotters silenced any reform advocates
among the nobles, and for about three decades reform ideas remained
confined to poetry and philosophy. The magnates, who also feared that
the influx of revolutionary ideas might precipitate a popular uprising,
became a tool of the crown and seized the chance to further burden the
peasants.

Hungary - Economic and Social Developments

By the turn of the nineteenth century, the aim of Hungary's
agricultural producers had shifted from subsistence farming and
small-scale production for local trade to cash-generating, large-scale
production for a wider market. Road and waterway improvements cut
transportation costs, while urbanization in Austria, Bohemia, and
Moravia and the need for supplies for the Napoleonic wars boosted demand
for foodstuffs and clothing. Hungary became a major grain and wool
exporter. New lands were cleared, and yields rose as farming methods
improved. Hungary did not reap the full benefit of the boom, however,
because most of the profits went to the magnates, who considered them
not as capital for investment but as a means of adding luxury to their
lives. As expectations rose, goods such as linen and silverware, once
considered luxuries, became necessities. The wealthy magnates had little
trouble balancing their earnings and expenditures, but many lesser
nobles, fearful of losing their social standing, went into debt to
finance their spending.

Napoleon's final defeat brought recession. Grain prices collapsed as
demand dropped, and debt ensnared much of Hungary's lesser nobility.
Poverty forced many lesser nobles to work to earn a livelihood, and
their sons entered education institutions to train for civil service or
professional careers. The decline of the lesser nobility continued
despite the fact that by 1820 Hungary's exports had surpassed wartime
levels. As more lesser nobles earned diplomas, the bureaucracy and
professions became saturated, leaving a host of disgruntled graduates
without jobs. Members of this new intelligentsia quickly became enamored
of radical political ideologies emanating from Western Europe and
organized themselves to effect changes in Hungary's political system.

Francis rarely called the Diet into session (usually only to request
men and supplies for war) without hearing complaints. Economic hardship
brought the lesser nobles' discontent to a head by 1825, when Francis
finally convoked the Diet after a fourteen-year hiatus. Grievances were
voiced, and open calls for reform were made, including demands for less
royal interference in the nobles' affairs and for wider use of the
Hungarian language.

The first great figure of the reform era came to the fore during the
1825 convocation of the Diet. Count Istvan Szechenyi, a magnate from one
of Hungary's most powerful families, shocked the Diet when he delivered
the first speech in Hungarian ever uttered in the upper chamber and
backed a proposal for the creation of a Hungarian academy of arts and
sciences by pledging a year's income to support it. In 1831 angry nobles
burned Szechenyi's book Hitel (Credit), in which he argued that
the nobles' privileges were both morally indefensible and economically
detrimental to the nobles themselves. Szechenyi called for an economic
revolution and argued that only the magnates were capable of
implementing reforms. Szechenyi favored a strong link with the Habsburg
Empire and called for abolition of entail and serfdom, taxation of
landowners, financing of development with foreign capital, establishment
of a national bank, and introduction of wage labor. He inspired such
project as the construction of the suspension bridge linking Buda and
Pest. Szechenyi's reform initiatives ultimately failed because they were
targeted at the magnates, who were not inclined to support change, and
because the pace of his program was too slow to attract disgruntled
lesser nobles.

The most popular of Hungary's great reform leaders, Lajos Kossuth,
addressed passionate calls for change to the lesser nobles. Kossuth was
the son of a landless, lesser nobleman of Protestant background. He
practiced law with his father before moving to Pest. There he published
commentaries on the Diet's activities, which made him popular with
young, reform-minded people. Kossuth was imprisoned in 1836 for treason.
After his release in 1840, he gained quick notoriety as the editor of a
liberal party newspaper. Kossuth argued that only political and economic
separation from Austria would improve Hungary's plight. He called for
broader parliamentary democracy, industrialization, general taxation,
economic expansion through exports, and abolition of privileges and
serfdom. But Kossuth was also a Magyar chauvinist whose rhetoric
provoked the strong resentment of Hungary's minority ethnic groups.
Kossuth gained support among liberal lesser nobles, who constituted an
opposition minority in the Diet. They sought reforms with increasing
success after Francis's death in 1835 and the succession of Ferdinand V
(1835-48). In 1843 a law was enacted making Hungarian the country's
official language over the strong objections of the Croats, Slovaks,
Serbs, and Romanians.

Hungary - The Revolution of March 1848

In March 1848, revolution erupted in Vienna, forcing Austria's
Chancellor Klemens von Metternich to flee the capital. Unrest broke out
in Hungary on March 15, when radicals and students stormed the Buda
fortress to release political prisoners. A day later, the Diet's
liberal-dominated lower house demanded establishment of a national
government responsible to an elected parliament, and on March 22 a new
national cabinet took power with Count Louis Batthyany as chairman,
Kossuth as minister of finance, and Szechenyi as minister of public
works. Under duress, the Diet's upper house approved a sweeping reform
package, signed by Ferdinand, that altered almost every aspect of
Hungary's economic, social, and political life. These so-called April
Laws created independent Hungarian ministries of defense and finance,
and the new government claimed the right to issue currency through its
own central bank. Guilds lost their privileges; the nobles became
subject to taxation; entail, tithes, and the corvee were abolished; some
peasants became freehold proprietors of the land they worked; freedom of
the press and assembly were created; a Hungarian national guard was
established; and Transylvania was brought under Hungarian rule.

The non-Magyar ethnic groups in Hungary feared the nationalism of the
new Hungarian government, and Transylvanian Germans and Romanians
opposed the incorporation of Transylvania into Hungary. The Vienna
government enlisted the minorities in the first attempt to overthrow the
Hungarian government. Josip Jelacic--a fanatic anti-Hungarian--became
governor of Croatia on March 22 and severed relations with the Hungarian
government a month later. By summer the revolution's momentum began to
wane. The Austrians ordered the Hungarian diet to dissolve, but the
order went unheeded. In September Jelacic led an army into Hungary.
Batthyany resigned, and a mob lynched the imperial commander in Pest. A
committee of national defense under Kossuth took control, authorized the
establishment of a Hungarian army, and issued paper money to fund it. On
October 30, 1848, imperial troops entered Vienna and suppressed a
workers' uprising, effectively ending the revolution everywhere in the
empire except Hungary, where Kossuth's army had overcome Jelacic's
forces. In December Ferdinand abdicated in favor of Franz Joseph
(1848-1916), who claimed more freedom of action because, unlike
Ferdinand, he had given no pledge to respect the April Laws. The
Magyars, however, refused to recognize him as their king because he was
never crowned.

The imperial army captured Pest early in 1849, but the revolutionary
government remained entrenched in Debrecen. In April a "rump"
Diet deposed the Habsburg Dynasty in Hungary, proclaimed Hungary a
republic, and named Kossuth governor with dictatorial powers. After the
declaration, Austrian reinforcements were transferred to Hungary, and in
June, at Franz Joseph's request, Russian troops attacked from the east
and overwhelmed the Hungarians. The Hungarian army surrendered on August
13, and Kossuth escaped to the Ottoman Empire. A period of harsh
repression followed. Batthyany and about 100 others were shot, several
society women were publicly whipped, and the government outlawed public
gatherings, theater performances, display of the national colors, and
wearing of national costumes and Kossuth-style beards.

Hungary - Aftermath of the Revolution

After the revolution, the emperor revoked Hungary's constitution and
assumed absolute control. Franz Joseph divided the country into four
distinct territories: Hungary, Transylvania, Croatia-Slavonia, and
Vojvodina. German and Bohemian administrators managed the government,
and German became the language of administration and higher education.
The non-Magyar minorities of Hungary received little for their support
of Austria during the turmoil. A Croat reportedly told a Hungarian:
"We received as a reward what the Magyars got as a
punishment."

Hungarian public opinion split over the country's relations with
Austria. Some Hungarians held out hope for full separation from Austria;
others wanted an accommodation with the Habsburgs, provided that they
respected Hungary's constitution and laws. Ferencz Deak became the main
advocate for accommodation. Deak upheld the legality of the April Laws
and argued that their amendment required the Hungarian Diet's consent.
He also held that the dethronement of the Habsburgs was invalid. As long
as Austria ruled absolutely, Deak argued, Hungarians should do no more
than passively resist illegal demands.

The first crack in Franz Joseph's neo-absolutist rule developed in
1859, when the forces of Sardinia and France defeated Austria at
Solferno. The defeat convinced Franz Joseph that national and social
opposition to his government was too strong to be managed by decree from
Vienna. Gradually he recognized the necessity of concessions toward
Hungary, and Austria and Hungary thus moved toward a compromise. In 1866
the Prussians defeated the Austrians, further underscoring the weakness
of the Habsburg Empire. Negotiations between the emperor and the
Hungarian leaders were intensified and finally resulted in the
Compromise of 1867, which created the Dual Monarchy of Austra-Hungary,
also known as the Austro-Hungarian Empire.

Hungary - DUAL MONARCHY

The Compromise of 1867, which created the Dual Monarchy, gave the
Hungarian government more control of its domestic affairs than it had
possessed at any time since the Battle of Mohacs. However, the new
government faced severe economic problems and the growing restiveness of
ethnic minorities. World War I led to the disintegration of
Austria-Hungary, and in the aftermath of the war, a series of
governments--including a communist regime--assumed power in Buda and
Pest (in 1872 the cities of Buda and Pest united to become Budapest).

Constitutional and Legal Framework

Once again a Habsburg emperor became king of Hungary, but the
compromise strictly limited his power over the country's internal
affairs, and the Hungarian government assumed control over its domestic
affairs. The Hungarian government consisted of a prime minister and
cabinet appointed by the emperor but responsible to a bicameral
parliament elected by a narrow franchise. Joint Austro-Hungarian affairs
were managed through "common" ministries of foreign affairs,
defense, and finance. The respective ministers were responsible to
delegations representing separate Austrian and Hungarian parliaments.
Although the "common" ministry of defense administered the
imperial and royal armies, the emperor acted as their commander in
chief, and German remained the language of command in the military as a
whole. The compromise designated that commercial and monetary policy,
tariffs, the railroad, and indirect taxation were "common"
concerns to be negotiated every ten years. The compromise also returned
Transylvania, Vojvodina, and the military frontier to Hungary's
jurisdiction.

At Franz Joseph's insistence, Hungary and Croatia reached a similar
compromise in 1868, giving the Croats a special status in Hungary. The
agreement granted the Croats autonomy over their internal affairs. The
Croatian ban would now be nominated by the Hungarian prime
minister and appointed by the king. Areas of "common" concern
to Hungarians and Croats included finance, currency matters, commercial
policy, the post office, and the railroad. Croatian became the official
language of Croatia's government, and Croatian representatives
discussing "common" affairs before the Hungarian diet were
permitted to speak Croatian.

The Nationalities Law enacted in 1868 defined Hungary as a single
nation comprising different nationalities whose members enjoyed equal
rights in all areas except language. Although non-Hungarian languages
could be used in local government, churches, and schools, Hungarian
became the official language of the central government and universities.
Many Hungarians thought the act too generous, while minority-group
leaders rejected it as inadequate. Slovaks in northern Hungary,
Romanians in Transylvania, and Serbs in Vojvodina all wanted more
autonomy, and unrest followed the act's passage. The government took no
further action concerning nationalities, and discontent fermented.

Anti-Semitism appeared in Hungary early in the century as a result of
fear of economic competition. In 1840 a partial emancipation of the Jews
allowed them to live anywhere except certain depressed mining cities.
The Jewish Emancipation Act of 1868 gave Jews equality before the law
and effectively eliminated all bars to their participation in the
economy; nevertheless, informal barriers kept Jews from careers in
politics and public life.

Hungary - Rise of the Liberal Party

Franz Joseph appointed Gyula Andrassy--a member of Deak's
party--prime minister in 1867. His government strongly favored the
Compromise of 1867 and followed a laissez-faire economic policy. Guilds
were abolished, workers were permitted to bargain for wages, and the
government attempted to improve education and construct roads and
railroads. Between 1850 and 1875, Hungary's farms prospered: grain
prices were high, and exports tripled. But Hungary's economy accumulated
capital too slowly, and the government relied heavily on foreign
credits. In addition, the national and local bureaucracies began to grow
immediately after the compromise became effective. Soon the cost of the
bureaucracy outpaced the country's tax revenues, and the national debt
soared. After an economic downturn in the mid-1870s, Deak's party
succumbed to charges of financial mismanagement and scandal.

As a result of these economic problems, Kalman Tisza's Liberal Party,
created in 1875, gained power in 1875. Tisza assembled a bureaucratic
political machine that maintained control through corruption and
manipulation of a woefully unrepresentative electoral system. In
addition, Tisza's government had to withstand both dissatisfied
nationalities and Hungarians who thought Tisza too submissive to the
Austrians. The Liberals argued that the Dual Monarchy improved Hungary's
economic position and enhanced its influence in European politics.

Tisza's government raised taxes, balanced the budget within several
years of coming to power, and completed large road, railroad, and
waterway projects. Commerce and industry expanded quickly. After 1880
the government abandoned its laissez-faire economic policies and
encouraged industry with loans, subsidies, government contracts, tax
exemptions, and other measures. The number of Hungarians who earned
their living in industry doubled to 24.2 percent of the population
between 1890 and 1910, while the number dependent on agriculture dropped
from 82 to 62 percent. However, the 1880s and 1890s were depression
years for the peasantry. Rail and steamship transport gave North
American farmers access to European markets, and Europe's grain prices
fell by 50 percent. Large landowners fought the downturn by seeking
trade protection and other political remedies; the lesser nobles, whose
farms failed in great numbers, sought positions in the still-burgeoning
bureaucracy. By contrast, the peasantry resorted to subsistence farming
and worked as laborers to earn money.

Hungary - Social Changes

Hungary's population rose from 13 million to 20 million between 1850
and 1910. After 1867 Hungary's feudal society gave way to a more complex
society that included the magnates, lesser nobles, middle class, working
class, and peasantry. However, the magnates continued to wield great
influence through several conservative parties because of their massive
wealth and dominant position in the upper chamber of the diet. They
fought modernization and sought both closer ties with Vienna and a
restoration of Hungary's traditional social structure and institutions,
arguing that agriculture should remain the mission of the nobility. They
won protection from the market by reestablishment of a system of entail
and also pushed for restriction of middle-class profiteering and
restoration of corporal punishment. The Roman Catholic Church was a
major ally of the magnates.

Some lesser-noble landowners survived the agrarian depression of the
late nineteenth century and continued farming. Many others turned to the
bureaucracy or to the professions.

In the mid-1800s, Hungary's middle class consisted of a small number
of German and Jewish merchants and workshop owners who employed a few
craftsmen. By the turn of the century, however, the middle class had
grown in size and complexity and had become predominantly Jewish. In
fact, Jews created the modern economy that supported Tisza's
bureaucratic machine. In return, Tisza not only denounced anti-Semitism
but also used his political machine to check the growth of an
anti-Semitic party. In 1896 his successors passed legislation securing
the Jews' final emancipation. By 1910 about 900,000 Jews made up
approximately 5 percent of the population and about 23 percent of
Budapest's citizenry. Jews accounted for 54 percent of commercial
business owners, 85 percent of financial institution directors and
owners, and 62 percent of all employees in commerce.

The rise of a working class came naturally with industrial
development. By 1900 Hungary's mines and industries employed nearly 1.2
million people, representing 13 percent of the population. The
government favored low wages to keep Hungarian products competitive on
foreign markets and to prevent impoverished peasants from flocking to
the city to find work. The government recognized the right to strike in
1884, but labor came under strong political pressure. In 1890 the Social
Democratic Party was established and secretly formed alliances with the
trade unions. The party soon enlisted one-third of Budapest's workers.
By 1900 the party and union rolls listed more than 200,000 hard-core
members, making it the largest secular organization the country had ever
known. The diet passed laws to improve the lives of industrial workers,
including providing medical and accident insurance, but it refused to
extend them voting rights, arguing that broadening the franchise would
give too many non-Hungarians the vote and threaten Hungarian domination.
After the Compromise of 1867, the Hungarian government also launched an
education reform in an effort to create a skilled, literate labor force.
As a result, the literacy rate had climbed to 80 percent by 1910.
Literacy raised the expectations of workers in agriculture and industry
and made them ripe for participation in movements for political and
social change.

The plight of the peasantry worsened drastically during the
depression at the end of the nineteenth century. The rural population
grew, and the size of the peasants' farm plots shrank as land was
divided up by successive generations. By 1900 almost half of the
country's landowners were scratching out a living from plots too small
to meet basic needs, and many farm workers had no land at all. Many
peasants chose to emigrate, and their departure rate reached
approximately 50,000 annually in the 1870s and about 200,000 annually by
1907. The peasantry's share of the population dropped from 72.5 percent
in 1890 to 68.4 percent in 1900. The countryside also was characterized
by unrest, to which the government reacted by sending in troops, banning
all farm-labor organizations, and passing other repressive legislation.

In the late nineteenth century, the Liberal Party passed laws that
enhanced the government's power at the expense of the Roman Catholic
Church. The parliament won the right to veto clerical appointments, and
it reduced the church's nearly total domination of Hungary's education
institutions. Additional laws eliminated the church's authority over a
number of civil matters and, in the process, introduced civil marriage
and divorce procedures.

The Liberal Party also worked with some success to create a unified,
Magyarized state. Ignoring the Nationalities Law, they enacted laws that
required the Hungarian language to be used in local government and
increased the number of school subjects taught in that language. After
1890 the government succeeded in Magyarizing educated Slovaks, Germans,
Croats, and Romanians and co-opting them into the bureaucracy, thus
robbing the minority nationalities of an educated elite. Most minorities
never learned to speak Hungarian, but the education system made them
aware of their political rights, and their discontent with Magyarization
mounted. Bureaucratic pressures and heightened fears of territorial
claims against Hungary after the creation of new nation-states in the
Balkans forced Tisza to outlaw "national agitation" and to use
electoral legerdemain to deprive the minorities of representation.
Nevertheless, in 1901 Romanian and Slovak national parties emerged
undaunted by incidents of electoral violence and police repression.

Hungary - Political and Economic Life, 1905-19

Tisza directed the Liberal government until 1890, and for fourteen
years thereafter a number of Liberal prime ministers held office.
Agricultural decline continued, and the bureaucracy could no longer
absorb all of the pauperized lesser nobles and educated people who could
not find work elsewhere. This group gave its political support to the
Party of Independence and the Party of Forty-Eight, which became part of
the "national" opposition that forced a coalition with the
Liberals in 1905. The Party of Independence resigned itself to the
existence of the Dual Monarchy and sought to enhance Hungary's position
within it; the Party of Forty-Eight, however, deplored the Compromise of
1867, argued that Hungary remained an Austrian colony, and pushed for
formation of a Hungarian national bank and an independent customs zone.

Franz Joseph refused to appoint members of the coalition to the
government until they renounced their demands for concessions from
Austria concerning the military. When the coalition finally gained power
in 1906, the leaders retreated from their opposition to the compromise
of 1867 and followed the Liberal Party's economic policies. Istvan
Tisza--Kalman Tisza's son and prime minister from 1903 to 1905--formed
the new Party of Work, which in 1910 won a large majority in the
parliament. Tisza became prime minister for a second time in 1912 after
labor strife erupted over an unsuccessful attempt to expand voting
rights.

Hungary - World War I

On June 28, 1914, a Bosnian Serb assassinated Archduke Franz
Ferdinand, heir to the Austrian throne. Within days AustriaHungary
presented Serbia with an ultimatum that made war inevitable. Tisza
initially opposed the ultimatum but changed his mind when Germany
supported Austria-Hungary. By late August, all the great European powers
were at war. Bands playing military music and patriotic demonstrators
expecting a quick, easy victory took to Budapest's streets after the
declaration of war. However, Hungary, was ill prepared to fight. The
country's armaments were obsolete, and its industries were not prepared
for a war economy. In 1915 and 1916, Hungary felt the full impact of the
war. Inflation ran rampant, wages were frozen, food shortages developed,
and the government banned export of grain even to Austria. Franz Joseph
died in 1916, and Karl IV (1916-18) became Hungary's new king. Before
being crowned, however, Karl insisted that Hungarians has expanded
voting rights. Tisza resigned in response. By 1917 the Hungarian
government was slowly losing domestic control in the face of mounting
popular dissatisfaction caused by the war. Of the 3.6 million soldiers
Hungary sent to war, 2.1 million became casualties. By late 1918,
Hungary's farms and factories were producing only half of what they did
in 1913, and the war-weary people had abandoned hope of victory.

On October 31, 1918, smoldering unrest burst into revolution in
Budapest, and roving soldiers assassinated Istvan Tisza. Pressured by
the popular uprising and the refusal of Hungarian troops to quell
disturbances, King Karl was compelled to appoint the "Red
Count," Mihaly Karolyi, a pro-Entente liberal and leader of the
Party of Independence, to the post of prime minister.
Chrysanthemum-waving crowds poured into the streets shouting their
approval. Karolyi formed a new cabinet, whose members were drawn from
the new National Council, composed of representatives of the Party of
Independence, the Social Democratic Party, and a group of bourgeoisie
radicals. After suing for a separate peace, the new government dissolved
the parliament, pronounced Hungary an independent republic with Karolyi
as provisional president, and proclaimed universal suffrage and freedom
of the press and assembly. The government launched preparations for land
reform and promised elections, but neither goal was carried out. On
November 13, 1918, Karl IV surrendered his powers as king of Hungary;
however, he did not abdicate, a technicality that made a return to the
throne possible.

The Karolyi government's measures failed to stem popular discontent,
especially when the Entente powers began distributing slices of
Hungary's traditional territory to Romania, Yugoslavia, and
Czechoslovakia. The new government and its supporters had pinned their
hopes for maintaining Hungary's territorial integrity on abandoning
Austria and Germany, securing a separate peace, and exploiting Karolyi's
close connections in France. The Entente, however, chose to consider
Hungary a partner in the defeated Dual Monarchy and dashed the
Hungarians' hopes with the delivery of each new diplomatic note
demanding surrender of more land. On March 19, 1919, the French head of
the Entente mission in Budapest handed Karolyi a note delineating final
postwar boundaries, which were unacceptable to all Hungarians. Karolyi
resigned and turned power over to a coalition of Social Democrats and
communists, who promised that Soviet Russia would help Hungary restore
its original borders. Although the Social Democrats held a majority in
the coalition, the communists under Bela Kun immediately seized control
and announced the establishment of the Hungarian Soviet Republic.

Hungary - Hungarian Soviet Republic

The rise of the Hungarian Communist Party (HCP) to power was swift.
The party was organized in a Moscow hotel on November 4, 1918, when a
group of Hungarian prisoners of war and communist sympathizers formed a
Central Committee and dispatched members to Hungary to recruit new
members, propagate the party's ideas, and radicalize Karolyi's
government. By February 1919, the party numbered 30,000 to 40,000
members, including many unemployed ex-soldiers, young intellectuals, and
Jews. In the same month, Kun was imprisoned for incitement to riot, but
his popularity skyrocketed when a journalist reported that he had been
beaten by the police. Kun emerged from jail triumphant when the Social
Democrats handed power to a government of "People's
Commissars," who proclaimed the Hungarian Soviet Republic on March
21, 1919.

The communists wrote a temporary constitution guaranteeing freedom of
speech and assembly; free education, language and cultural rights to
minorities; and other rights. It also provided for suffrage for people
over eighteen years of age except clergy, "former exploiters,"
and certain others. Single-list elections took place in April, but
members of the parliament were selected indirectly by popularly elected
committees. On June 25, Kun's government proclaimed a dictatorship of
the proletariat, nationalized industrial and commercial enterprises, and
socialized housing, transport, banking, medicine, cultural institutions,
and all landholdings of more than 40.5 hectares. Kun undertook these
measures even though the Hungarian communists were relatively few, and
the support they enjoyed was based far more on their program to restore
Hungary's borders than on their revolutionary agenda. Kun hoped that the
Soviet Russian government would intervene on Hungary's behalf and that a
worldwide workers' revolution was imminent. In an effort to secure its
rule in the interim, the communist government resorted to arbitrary
violence. Revolutionary tribunals ordered about 590 executions,
including some for "crimes against the revolution." The
government also used "red terror" to expropriate grain from
peasants. This violence and the regime's moves against the clergy also
shocked many Hungarians.

In late May, Kun attempted to fulfill his promise to restore
Hungary's borders. The Hungarian Red Army marched northward and
reoccupied part of Slovakia. Despite initial military success, however,
Kun withdrew his troops about three weeks later when the French
threatened to intervene. This concession shook his popular support. Kun
then unsuccessfully turned the Hungarian Red Army on the Romanians, who
broke through Hungarian lines on July 30, occupied and looted Budapest,
and ousted Kun's Soviet Republic on August 1, 1919. Kun fled first to
Vienna and then to Soviet Russia, where he was executed during Stalin's
purge of foreign communists in the late 1930s.

Hungary - Counterrevolution

A militantly anticommunist authoritarian government composed of
military officers entered Budapest on the heels of the Romanians. A
"white terror" ensued that led to the imprisonment, torture,
and execution without trial of communists, socialists, Jews, leftist
intellectuals, sympathizers with the Karolyi and Kun regimes, and others
who threatened the traditional Hungarian political order that the
officers sought to reestablish. Estimates placed the number of
executions at approximately 5,000. In addition, about 75,000 people were
jailed. In particular, the Hungarian right wing and the Romanian forces
targeted Jews for retribution. Ultimately, the white terror forced
nearly 100,000 people to leave the country, most of them socialists,
intellectuals, and middle-class Jews.

Hungary - TRIANON HUNGARY

After World War I, a conservative government ruled Hungary and made
some progress toward economic modernization. The Great Depression,
however, brought economic collapse, and the country's mood shifted to
the far right. An alliance with Nazi Germany resulted, and Hungary
fought on the Axis side in World War II. Again Hungary experienced
defeat, and the country was occupied by the Soviet Red Army.

Postwar Political and Economic Conditions

In 1920 and 1921, internal chaos racked Hungary. The white terror
continued to plague Jews and leftists, unemployment and inflation
soared, and penniless Hungarian refugees poured across the border from
neighboring countries and burdened the floundering economy. The
government offered the population little succor. In January 1920,
Hungarian men and women cast the first secret ballots in the country's
political history and elected a large counterrevolutionary and agrarian
majority to a unicameral parliament. Two main political parties emerged:
the socially conservative Christian National Union and the Independent
Smallholders' Party, which advocated land reform. In March the
parliament annulled both the Pragmatic Sanction of 1723 and the
Compromise of 1867, and it restored the Hungarian monarchy but postponed
electing a king until civil disorder had subsided. Instead, Miklos
Horthy (1920-44)--a former commander in chief of the Austro-Hungarian
navy--was elected regent and was empowered, among other things, to
appoint Hungary's prime minister, veto legislation, convene or dissolve
the parliament, and command the armed forces.

Hungary's signing of the Treaty of Trianon on June 4, 1920, ratified
the country's dismemberment, limited the size of its armed forces, and
required reparations payments. The territorial provisions of the treaty,
which ensured continued discord between Hungary and its neighbors,
required the Hungarians to surrender more than two-thirds of their
prewar lands. Romania acquired Transylvania; Yugoslavia gained Croatia,
Slavonia, and Vojvodina; Slovakia became a part of Czechoslovakia; and
Austria also acquired a small price of prewar Hungarian territory.
Hungary also lost about 60 percent of its prewar population, and about
one-third of the 10 million ethnic Hungarians found themselves outside
the diminished homeland. The country's ethnic composition was left
almost homogeneous. Hungarians constituted about 90 percent of the
population, Germans made up about 6 to 8 percent, and Slovaks, Croats,
Romanians, Jews, and other minorities accounted for the remainder.

New international borders separated Hungary's industrial base from
its sources of raw materials and its former markets for agricultural and
industrial products. Its new circumstances forced Hungary to become a
trading nation. Hungary lost 84 percent of its timber resources, 43
percent of its arable land, and 83 percent of its iron ore. Because most
of the country's prewar industry was concentrated near Budapest, Hungary
retained about 51 percent of its industrial population, 56 percent of
its industry, 82 percent of its heavy industry, and 70 percent of its
banks.

Hungary - Bethlen Government

Horthy appointed Pal Teleki prime minister in July 1920. His
right-wing government set quotas effectively limiting admission of Jews
to universities, legalized corporal punishment, and, to quiet rural
discontent, took initial steps toward fulfilling a promise of major land
reform by dividing about 385,000 hectares from the largest estates into
smallholdings. Teleki's government resigned, however, after the former
emperor, Karl IV, unsuccessfully attempted to retake Hungary's throne in
March 1921. King Karl's return narhed a split parties between
conservatives who favored a Habsburg restoration and nationalist
right-wing radicals who supported election of a Hungarian king. Bethlen,
a nonaffiliated, right-wing member of the parliament, took advantage of
this rift by convincing members of the Christian National Union who
opposed Karl's reenthronement to merge with the Smallholders' Party and
form a new Party of Unity with Bethlen as its leader. Horthy then
appointed Bethlen prime minister.

As prime minister, Bethlen dominated Hungarian politics between 1921
and 1931. He fashioned a political machine by amending the electoral
law, eliminating peasants from the Party of Unity, providing jobs in the
bureaucracy to his supporters, and manipulating elections in rural
areas. Bethlen restored order to the country by giving the radical
counterrevolutionaries payoffs and government jobs in exchange for
ceasing their campaign of terror against Jews and leftists. In 1921
Bethlen made a deal with the Social Democrats and trade unions,
agreeing, among other things, to legalize their activities and free
political prisoners in return for their pledge to refrain from spreading
anti-Hungarian propaganda, calling political strikes, and organizing the
peasantry. In May 1922, the Party of Unity captured a large
parliamentary majority. Karl IV's death, soon after he failed a second
time to reclaim the throne in October 1921, allowed the revision of the
Treaty of Trianon to rise to the top of Hungary's political agenda.
Bethlen's strategy to win the treaty's revision was first to strengthen
his country's economy and then to build relations with stronger nations
that could further Hungary's goals. Revision of the treaty had such a
broad backing in Hungary that Bethlen used it, at least in part, to
deflect criticism of his economic, social, and political policies.
However, Bethlen's only foreign policy success was a treaty of
friendship with Italy in 1927, which had little immediate impact.

Hungary - Economic Development

When Bethlen took office, the government was bankrupt. Tax revenues
were so paltry that he turned to domestic gold and foreign-currency
reserves to meet about half of the 1921-22 budget and almost 80 percent
of the 1922-23 budget. To improve his country's economic circumstances,
Bethlen undertook development of industry. He imposed tariffs on
finished goods and earmarked the revenues to subsidize new industries.
Bethlen squeezed the agricultural sector to increase cereal exports,
which generated foreign currency to pay for imports critical to the
industrial sector. In 1924, after the white terror had waned and Hungary
had gained admission to the League of Nations (1922), the Bethlen
government secured a US$50 million reconstruction loan from the league,
which restored the confidence of foreign creditors. Foreign loans and
domestic capital that had been removed from Hungary during the communist
revolution flowed back into the country, further fueling industrial
development.

By the late 1920s, Bethlen's policies had brought order to the
economy. The number of factories increased by about 66 percent,
inflation subsided, and the national income climbed 20 percent. However,
the apparent stability was supported by a rickety framework of
constantly revolving foreign credits and high world grain prices;
therefore, Hungary remained undeveloped in comparison with the wealthier
western European countries.

Despite economic progress, the workers' standard of living remained
poor, and consequently the working class never gave Bethlen its
political support. The peasants fared worse than the working class. In
the 1920s, about 60 percent of the peasants were either landless or were
cultivating plots too small to provide a decent living. Real wages for
agricultural workers remained below prewar levels, and the peasants had
practically no political voice. Moreover, once Bethlen had consolidated
his power, he ignored calls for land reform. The industrial sector
failed to expand fast enough to provide jobs for all the peasants and
university graduates seeking work. Most peasants lingered in the
villages, and in the 1930s Hungarians in rural areas were extremely
dissatisfied. Hungary's foreign debt ballooned as Bethlen expanded the
bureaucracy to absorb the university graduates who, if left idle, might
have threatened civil order.

Hungary - The Great Depression

In 1929 the New York Stock Exchange crashed. As a result, world grain
prices plummeted, and the framework supporting Hungary's economy
buckled. Hungary's earnings from grain exports declined as prices and
volume dropped, tax revenues fell, foreign credit sources dried up, and
short-term loans were called in. Hungary sought financial relief from
the League of Nations, which insisted on a program of rigid fiscal
belt-tightening, resulting in increased unemployment. The peasants
reverted to subsistence farming. Industrial production rapidly dropped,
and businesses went bankrupt as domestic and foreign demand evaporated.
Government workers lost their jobs or suffered severe pay cuts. By 1933
about 18 percent of Budapest's citizens lived in poverty. Unemployment
leaped from 5 percent in 1928 to almost 36 percent by 1933.

As the standard of living dropped, the political mood of the country
shifted further toward the right. Bethlen resigned without warning amid
national turmoil in August 1931. His successor, Gyula Karolyi, failed to
quell the crisis. Horthy then appointed a reactionary demagogue, Gyula
Gombos, but only after Gombos agreed to maintain the existing political
system, to refrain from calling elections before the parliament's term
had expired, and to appoint several Bethlen supporters to head key
ministries. Gombos publicly renounced the vehement anti-Semitism he had
espoused earlier, and his party and government included some Jews.

Hungary - Radical Right in Power

Gombos's appointment marked the beginning of the radical right's
ascendancy in Hungarian politics, which lasted with few interruptions
until 1945. The radical right garnered its support from medium and small
farmers, former refugees from Hungary's lost territories, and unemployed
civil servants, army officers, and university graduates. Gombos
advocated a one-party government, revision of the Treaty of Trianon,
withdrawal from the League of Nations, anti-intellectualism, and social
reform. He assembled a political machine, but his efforts to fashion a
one-party state and fulfill his reform platform were frustrated by a
parliament composed mostly of Bethlen's supporters and by Hungary's
creditors, who forced Gombos to follow conventional policies in dealing
with the economic and financial crisis. The 1935 elections gave Gombos
more solid support in the parliament, and he succeeded in gaining
control of the ministries of finance, industry, and defense and in
replacing several key military officers with his supporters. In
September 1936, Gombos informed German officials that he would establish
a Nazi-like, one-party government in Hungary within two years, but he
died in October without realizing this goal.

In foreign affairs, Gombos led Hungary toward close relations with
Italy and Germany; in fact, Gombos coined the term Axis, which
was later adopted by the German-Italian military alliance. Soon after
his appointment, Gombos visited Italian dictator Benito Mussolini and
gained his support for revision of the Treaty of Trianon. Later, Gombos
became the first foreign head of government to visit German chancellor
Adolf Hitler. For a time, Hungary profited handsomely, as Gombos signed
a trade agreement with Germany that drew Hungary's economy out of
depression but made Hungary dependent on the German economy for both raw
materials and markets. In 1928 Germany had accounted for 19.5 percent of
Hungary's imports and 11.7 percent of its exports; by 1939 the figures
were 52.5 percent and 52.2 percent, respectively. Hungary's annual rate
of economic growth from 1934 to 1940 averaged 10.8 percent. The number
of workers in industry doubled in the ten years after 1933, and the
number of agricultural workers dropped below 50 percent for the first
time in the country's history. Hungary also used its relationship with
Germany to chip away at the Treaty of Trianon. In 1938 Hungary openly
repudiated the treaty's restrictions on its armed forces. With German
help, Hungary extended its territory four times and doubled in size from
1938 to 1941. It regained parts of southern Slovakia in 1938,
Carpatho-Ukraine in 1939, northern Transylvania in 1940, and parts of
Vojvodina in 1941.

Hitler's assistance did not come without a price. After 1938 the
fuhrer used promises of additional territories, economic pressure, and
threats of military intervention to pressure the Hungarians into
supporting his policies, including those related to Europe's Jews, which
encouraged Hungary's anti-Semites. The percentage of Jews in business,
finance, and the professions far exceeded the percentage of Jews in the
overall population. The 1930 census showed that Jews made up only 5.1
percent of the population but provided 54.5 percent of its physicians,
31.7 percent of its journalists, and 49.2 percent of its lawyers. Jews
controlled an estimated 19.5 percent to 33 percent of the national
income, four of the five leading banks, and 80 percent of Hungary's
industry. After the depression struck, anti-Semites made the Jews
scapegoats for Hungary's economic plight.

Hungary's Jews suffered the first blows of this renewed anti-Semitism
during the government of Gombos's successor, Kalman Daranyi, who
fashioned a coalition of conservatives and reactionaries and dismantled
Gombos's political machine. After Horthy publicly dashed hopes of land
reform, discontented rightwingers took to the streets denouncing the
government and baiting the Jews. Daranyi's government attempted to
appease the anti-Semites and the Nazis by proposing and passing the
first socalled Jewish Law, which set quotas limiting Jews to 20 percent
of the positions in certain businesses and professions. The law failed
to satisfy Hungary's anti-Semitic radicals, however, and when Daranyi
tried to appease them again, Horthy unseated him in 1938. The regent
then appointed the ill-starred Bela Imredy, who drafted a second,
harsher Jewish Law before political opponents forced his resignation in
February 1939 by presenting documents showing that Imredy's own
grandfather was a Jew.

Imredy's downfall led to Pal Teleki's return to the prime minister's
office. Teleki dissolved some of the fascist parties but did not alter
the fundamental policies of his predecessors. He undertook a
bureaucratic reform and launched cultural and educational programs to
help the rural poor. Illiteracy dropped to about 7 percent by 1941. But
Teleki also oversaw passage of the second Jewish Law, which broadened
the definition of "Jewishness," cut the quotas on Jews
permitted in the professions and in business, and required that the
quotas be attained by the hiring of Gentiles or the firing of Jews. By
the June 1939 elections, Hungarian public opinion had shifted so far to
the right that voters gave the Arrow Cross Party--Hungary's equivalent
of Germany's National Socialist German Workers' Party (the Nazi
Party)--the second highest number of votes. In September 1940, the
Hungarian government allowed German troops to transit the country on
their way to Romania, and on November 20, 1940, Hungary signed the
Tripartite Pact, which allied Germany, Italy, and Japan.

Hungary - World War II

In December 1940, Teleki signed a short-lived Treaty of Eternal
Friendship with Yugoslavia. The Yugoslav government, however, was
overthrown on March 27, 1941, two days after it succumbed to German and
Italian pressure and joined the pact. Hitler considered the overthrow a
hostile act and grounds to invade. Again promising territory in exchange
for cooperation, he asked Hungary to join the invasion by contributing
troops and allowing the Wehrmacht (German armed forces) to march through
its territory. Unable to prevent the invasion, Teleki committed suicide
on April 3. Three days later, the Luftwaffe mercilessly bombed Belgrade
without warning, and German troops invaded. Shortly thereafter, Horthy
dispatched Hungarian military forces to occupy former Hungarian lands in
Yugoslavia, and Hungary eventually annexed sections of Vojvodina.

Horthy named the right-wing radical Laszlo Bardossy to succeed
Teleki. Bardossy was convinced that Germany would win the war and sought
to maintain Hungary's independence by appeasing Hitler. Hitler tricked
Horthy into committing Hungary to join his invasion of the Soviet Union
in June 1941, and Hungary entered the war against the Western Allies the
following December. In July 1941, the government deported the first
40,000 Jews from Hungary, and six months later Hungarian troops, in
reprisal for resistance activities, murdered 3,000 Serbian and Jewish
hostages--near Novi Sad in Yugoslavia. By the winter of 1941-42, German
hopes of a quick victory over the Soviet Union had faded. In January the
German foreign minister visited Budapest asking for additional
mobilization of Hungarian forces for a planned spring offensive and
promising in return to hand Hungary some territory in Transylvania.
Bardossy agreed and committed onethird of Hungary's military forces.

Horthy grew dissatisfied with Bardossy, who resigned in March 1942,
and named Miklos Kallay, a conservative veteran of Bethlen's government,
who aimed to free Hungary from the Nazis' grip. Kallay faced a terrible
dilemma: if he broke with Hitler and negotiated a separate peace, the
Germans would occupy Hungary immediately; but if he supported the
Germans, he would encourage further pro-Nazi excesses. Kallay chose
duplicity. In 1942 and 1943, pro-Western Hungarian government officials
promised British and American diplomats that the Hungarians would not
fire on their aircraft, sparing for a time Hungarian cities from
bombardment.

In January 1943, the Soviet Red Army annihilated Hungary's Second
Army during the massive counterattack on the Axis troops besieging
Stalingrad. In the fighting, Soviet troops killed an estimated 40,000
Hungarians and wounded 70,000. As anti-Axis pressure in Hungary mounted,
Kallay withdrew the remnants of the force into Hungary in April 1943,
and only a nominal number of poorly armed troops remained of the
country's military contribution to the Axis Powers. Aware of Kallay's
deceit and fearing that Hungary might conclude a separate peace, Hitler
ordered Nazi troops to occupy Hungary and force its government to
increase its contribution to the war effort. Kallay took asylum in the
Turkish legation. Dome Sztojay, a supporter of the Nazis, became the new
prime minister. His government jailed political leaders, dissolved the
labor unions, and resumed the deportation of Hungary's Jews.

While Kallay was prime minister, the Jews endured economic and
political repression, but the government protected them from the
"final solution." The government expropriated Jewish property;
banned the purchase of real estate by Jews; barred Jews from working as
publishers, theater directors, and editors of journals; proscribed
sexual relations between Jews and non-Jews; and outlawed conversion to
Judaism. But when the Nazis occupied Hungary in March 1944, the
deportation of the Jews to the death camps in Poland began. Horthy used
the confusion after the July 20, 1944, attempt to assassinate Hitler to
replace Sztojay in August 1944 with General Geza Lakatos and halt the
deportation of Jews from Budapest. Of the approximately 725,000 Jews
residing within Hungary's expanded borders of 1941, only about 260,500,
mostly from Budapest, survived.

In September, Soviet forces crossed the border, and on October 15
Horthy announced that Hungary had signed an armistice with the Soviet
Union. However, the Germans abducted the regent and forced him to
abrogate the armistice, depose the Lakatos government, and name Ferenc
Szalasi--the leader of the Arrow Cross Party--prime minister. Horthy
abdicated, and soon the country became a battlefield. Hungary was sacked
first by the retreating Germans, who demolished the rail, road, and
communications systems, then by the advancing Soviet Red Army, which
found the country in a state of political chaos. Germans held off the
Soviet troops near Budapest for seven weeks before the defenses
collapsed, and on April 4, 1945, the last German troops were driven out
of Hungary.

Hungary - POSTWAR HUNGARY

In the aftermath of World War II, a victorious Soviet Union succeeded
in forcing its political, social, and economic system on Eastern Europe,
including Hungary. But the Hungarians never reconciled themselves to
Soviet hegemony over their country and rebelled against the Soviet Union
and its Hungarian vassals in 1956. That revolution was crushed by Soviet
tanks, but it brought to power Janos Kadar, who then attempted to
institute a milder form of communist rule.

Coalition Government and Communist Takeover

The Hungarian Communist Party (HCP) enjoyed scant popular support
after the toppling of Bela Kun's short-lived Hungarian Soviet Republic
in 1919 and the subsequent white terror. During World War II, a
communist cell headed by Laszlo Rajk, a veteran of the Spanish Civil War
(1936-39) and a former student communist leader, operated underground
within the country. Matyas Rakosi led a second, Moscow-based group whose
members were later called the "Muscovites." After the Soviet
Red Army invaded Hungary in September 1944, Rajk's organization emerged
from hiding, and the Muscovites returned to their homeland. Rakosi's
close ties with the Soviet occupiers enhanced his influence within the
party, and a rivalry developed between the Muscovites and Rajk's
followers. Between the invasion and the end of the war, party membership
rose significantly. Although party rolls listed only about 3,000 names
in November 1944, membership had swelled to about 500,000 by October
1945.

Hungary's postwar political order began to take shape even before
Germany's surrender. In October 1944, Britain's Prime Minister Winston
Churchill and Foreign Minister Anthony Eden agreed with Stalin that
after the war the Soviet Union would enjoy a 75 percent to 80 percent
influence in Hungary, Bulgaria, and Romania, while the British would
have a 20 percent to 25 percent share. On December 22, 1944, a
provisional government emerged in Debrecen that was made up of the
Provisional National Assembly, in which communist representatives
outnumbered those of the other "antifascist" parties, and a
cabinet, whose members included a general and two other military
officers of the old regime, two communists, two Social Democrats, two
members of the Independent Smallholders' Party, one member of the
National Peasant Party, and one unaffiliated member. The provisional
government concluded an armistice with the Soviet Union on January 20,
1945, while fighting still raged in the western part of the country. The
armistice established the Allied Control Commission, with Soviet,
American, and British representatives, which held complete sovereignty
over the country. The commission's chairman, Marshal Kliment Voroshilov,
a member of Stalin's inner circle, exercised absolute control.

Stalin decided against an immediate communist seizure of power in
Hungary; rather, he instructed HCP leaders to take a gradualist approach
and share power with other parties in freely elected coalition
governments. Stalin informed Rakosi that a communist takeover would be
delayed ten to fifteen years in order to deflect Western criticism of
rapid communist takeovers in Poland, Bulgaria, Romania, and the Soviet
zone of Germany. Stalin desired a quick return to normal economic
activity to rebuild the Soviet Union and sought to avoid a confrontation
with the Allies, who still had troops in Europe. The members of the HCP
who had worked underground during the war opposed Stalin's gradualist
approach and argued for immediate establishment of a dictatorship of the
proletariat.

In April 1945, after Soviet troops had rid Hungary of the Nazis, the
government moved from Debreceu to Budapest, and a second, expanded
Provisional National Assembly was chosen. With the support of
representatives of the trade unions and the Social Democratic Party, the
HCP enjoyed an absolute majority of the assembly's 495 seats. The
provisional government remained in power until November 15, 1945, when
voters dealt the HCP an unexpected setback in a free election. The
Independent Smallholders' Party won 245 seats in the National Assembly;
the HCP, 70; the Social Democratic Party, 69; the National Peasant
Party, 21; and the Civic Democratic Party, 2. The National Assembly
proclaimed the Hungarian Republic on February 1, 1946, and two
Smallholder-led coalitions under Zoltan Tildy and Ferenc Nagy governed
the country until May 1947.

The HCP soon formed a leftist alliance with the Social Democratic
Party and the National Peasant Party and gained control of several key
offices, including the leadership of the security police and the army
general staff. Voroshilov vetoed an agreement reached by the coalition
members to name a member of the Independent Smallholders' Party to head
the Ministry of Interior. A National Peasant Party member loyal to the
HCP won the post and made the police a powerful tool of the communists.
The National Assembly undermined freedoms guaranteed in Hungary's
constitution when it banned statements that could be interpreted as
hostile to the democratic order or the country's international esteem.
Later, as Hungary's democratic order became identified with HCP
policies, the law was used to silence legitimate opponents.

In the immediate postwar period, the government pursued economic
reconstruction and land reform. Hungary had been devastated in the last
years of World War II. About 24 percent of its industrial base was
destroyed. Many of the large landowners and industrialists fled Hungary
in advance of the Soviet Red Army. Reconstruction proceeded rapidly,
expedited by gradual nationalization of mines, electric plants, the four
largest concerns in heavy industry, and the ten largest banks. In 1945
the government also carried out a radical land reform, expropriating all
holdings larger than fifty-seven hectares and distributing them to the
country's poorest peasants. Nevertheless, the peasants received portions
barely large enough for self-sufficiency. Finally, the government
introduced a new currency--the forint--to help curb high inflation.

Using methods Rakosi later called "salami tactics," the HCP
strengthened its position in the coalition by discrediting leaders of
rival parties as "reactionaries" or
"antidemocratic," forcing their resignation from the
government and sometimes prompting their arrest. In 1945 ex-members of
Horthy's regime lost their positions. A year later, members of the
Smallholders' Party and the Social Democratic Party were ousted from
power. In late 1946, leaders of the Smallholders' Party were arrested.
In 1947 the Soviet Union ordered the arrest of Bela Kovacs, the
secretary general of the Independent Smallholders' Party, on the false
charge of plotting to overthrow the government. The Independent
Smallholders' Party was dissolved after Ferenc Nagy resigned his
position as prime minister. The leftist bloc gained a small lead over
its rivals in the 1947 general elections. The HCP tallied only 22
percent of the vote, but fraud tainted the election, and suspicions
arose that the party actually enjoyed less support.

The Treaty of Paris, signed on February 10, 1947, required Hungary to
pay US$200 million in reparations to the Soviet Union, US$50 million to
Czechoslovakia, and US$50 million to Yugoslavia. Hungary also had to
transfer a piece of territory to Czechoslovakia, leaving Hungary with
slightly less territory than it had had after the Treaty of Trianon.
Stalin had already returned Transylvania to the Romanians to reinforce
the position of the procommunist Prime Minister Petru Groza. Thereafter,
the Romanians' treatment of the Hungarian minority in Transylvania
became an irritant in relations between the two countries.

Hungary - Rakosi's Rule

In 1947 the postwar cooperation between the Soviet Union and the West
collapsed, marking the beginning of the Cold War and the beginning of
the end for Hungary's democratic coalition government. Having seen
communist parties seize power in Poland, Romania, Bulgaria, and
Yugoslavia and a communist insurgency threaten Greece, the Western
powers dedicated themselves to containing Soviet influence. In May
communists were expelled from the governments of Italy and France, and a
month later the United States promulgated the Marshall Plan for the
economic reconstruction of Europe, which was appealing to the to East
European governments.

Stalin feared a weakening of the Soviet Union's grip on Eastern
Europe. Anticommunist forces in the region remained potent, and most of
the communist governments were unpopular. In addition, East European
parties began taking positions independent of Moscow; for example,
communists in the Polish and Czechoslovak governments favored
participation in the Marshall Plan, and Yugoslavia and Bulgaria broached
the idea of a Balkan confederation. By September Stalin had abandoned
gradualism and reversed his earlier advocacy of independent,
"national roads to socialism." He now pushed for tighter
adherence to Moscow's line and rapid establishment of Soviet-dominated
communist states in Hungary and elsewhere. The policy shift was
indicated in September 1947 at the founding meeting of the Cominform, an
organization linking the Soviet communist party with the communist
parties of Eastern Europe, France, and Italy.

The HCP proceeded swiftly to assume full control of the government.
First Secretary Rakosi became the country's most powerful official and
dictated major political and economic changes. In October 1947,
noncommunist political figures were told to cooperate with a new
coalition government or leave the country. In June 1948, the Social
Democratic Party merged with the HCP, forming the Hungarian Workers'
Party (HWP). In 1949 the regime held a single-list election, and on
August 20 of that year the government ratified a Soviet-style
constitution. The official name of the country became the
Hungarian People's Republic, and the HWP's control of the government was
assured. In 1952 Rakosi also became prime minister.

In 1948 Yugoslavia was expelled from the Cominform, and the
Soviet-Yugoslav rift broke into the open. Almost overnight it became
treasonous for communists to display any approval of Yugoslav leader
Josip Broz Tito or to advocate national roads to socialism. Beginning in
1949, the Soviet Union unleashed a four-year reign of terror against
"Titoists" in Eastern Europe. Rakosi purged members of the
party's wartime underground, potential rivals, and hundreds of others.
Rajk, who continued to support a Hungarian road to socialism,
"confessed" to being a Titoist and a fascist spy and was
hanged in 1950. Another victim was future party chief Janos Kadar, who
was jailed and tortured for three years.

Between 1948 and 1953, the Hungarian economy was reorganized
according to the Soviet model. In a campaign reminiscent
of the Soviet Union's forced collectivization of agriculture in the
1930s, the regime compelled most peasants to join collective farms and
required them to make deliveries to the government at prices lower than
the cost of production. The regime accelerated nationalization of
banking, trade, and industry, and by December 1949 nearly 99 percent of
the country's workers had become state employees. The trade unions lost
their independence, and the government introduced Soviet-style central
planning. Planners neglected the production of consumer goods to focus
on investment in heavy industry, especially steel production, and
economic self-sufficiency. In January 1949, Hungary joined the Council
for Mutual Economic Assistance (Comecon), an organization designed to further economic cooperation
between the Soviet Union's satellites. The authorities also agreed to
form joint-stock companies with the Soviet Union. These companies
allowed the Soviet Union to dominate Hungary's air and river
transportation, as well as its bauxite, crude oil, and refining
industries and other sectors.

With the opposition parties disbanded and the trade unions collared,
the churches became the communists' main source of opposition. The
government had expropriated the churches' property with the land reform,
and in July 1948 it nationalized church schools. Protestant church
leaders reached a compromise with the government, but the head of the
Roman Catholic Church-- Cardinal Jozsef Mindszenty--resisted. The
government arrested him in December 1948 and sentenced him to life
imprisonment. Shortly thereafter, the regime disbanded most Catholic
religious orders, and it secularized Catholic schools.

Stalin died in March 1953. The new Soviet leadership soon permitted a
more flexible policy in Eastern Europe known as the New Course. In June,
Rakosi and other party leaders--among them Imre Nagy--were summoned to
Moscow, where Soviet leaders harshly criticized them for Hungary's
dismal economic performance. Soviet communist party Presidium member
Lavrenti Beria reportedly upbraided Rakosi for naming Jews to Hungary's
top party positions and accused him of seeking to make himself the
"Jewish King of Hungary." (Communists of Jewish origin had
dominated the party leadership and the secret police for a decade after
the war, and every party leader from Bela Kun to Erno Gero had Jewish
roots.) Rakosi retained his position as party chief, but the Soviet
leaders forced the appointment of Nagy as prime minister. He quickly won
the support of the government ministries and the intelligentsia. Nagy
also ended the purges and began freeing political prisoners. In his
first address to the National Assembly as prime minister, Nagy attacked
Rakosi for his use of terror, and the speech was printed in the party
newspaper.

Nagy charted his New Course for Hungary's drifting economy in a
speech before the Central Committee, which gave the plan unanimous
approval. Hungary ceased collectivization of agriculture,
allowed peasants to leave the collective farms, canceled the collective
farms' compulsory production quotas, and raised government prices for
deliveries. Government financial support and guarantees were extended to
private producers, investment in the farm sector jumped 20 percent in
the 1953-54 period, and peasants were able to increase the size of their
private plots. The number of peasants on collective farms thus shrank by
half between October and December 1953. Nagy also slashed investment in
heavy industry by 41.1 percent in 1953-54 and shifted resources to light
industry and the production of consumer goods. However, Nagy failed to
fundamentally alter the planning system and neglected to introduce
incentives to replace compulsory plan targets, resulting in a poorer
record of plan fulfillment after 1953 than before. Rakosi used his
influence to disrupt Nagy's reforms and erode his political position. In
1954 Soviet leaders who favored economic policies akin to Nagy's lost a
Kremlin power struggle. Rakosi seized the opportunity to attack Nagy as
a right-wing deviationist and to criticize shortcomings in the economy.
Nagy was forced to resign from the government in April 1955 and was
later expelled from the Politburo, Central Committee, and finally the
party itself. Thus, the Central Committee that had lauded the New Course
in June 1953 unanimously condemned its architect less than two years
later.

After Nagy's fall, collectivization and development of heavy industry
again became the prime focus of Hungary's economy. The purges did not
resume, however, as Rakosi did not enjoy the same amount of power or
Soviet support that he did while Stalin was alive. Moreover, he now had
to contend with many outspoken opponents within the party, including
numerous victims of the purges who had been readmitted to the HWP on
Moscow's orders. A schism soon split the party leadership from the rank
and file, and the party organization within the Writers' Association
became a forum for intraparty opposition. In 1955 a rapprochement
between the Soviet Union and Yugoslavia produced the Belgrade
Declaration, in which Moscow confirmed that each nation had the right to
follow its own road to socialism. One year later, Soviet leader Nikita
S. Khrushchev denounced Stalin in his "secret speech" before
the Twentieth Party Congress of the Soviet communist party. These
external events shook Rakosi, who was a strong opponent of Titoism and
the instigator of Hungary's purges.

HWP members opposed to Rakosi compelled him to admit that the purges
involved abuse of power and that Rajk and others had been its innocent
victims. Rakosi ordered an investigation, but it cleared him and blamed
the state security police instead. This result not only inflamed the
party opposition but also alienated Rakosi from the police. In June
1956, Rakosi's position became untenable. The party press printed open
attacks. The Writers' Association, the newly created Petofi Circle, and
student organizations clamored for Rakosi's ouster and arrest. On June
30, the Central Committee dissolved the Petofi Circle and expelled
intellectuals from the party. By mid-July, however, Soviet leaders began
to fear outright revolution and called for Rakosi to step down. He
resigned after a meeting of the Central Committee on July 17. Gero,
Rakosi's deputy, was appointed first secretary. Moscow hoped to
introduce a slow liberalization, but Gero was too closely identified
with Rakosi, and party discipline subsequently broke down completely.

Hungary - Revolution of 1956

On October 23, a Budapest student rally in support of Polish efforts
to win autonomy from the Soviet Union sparked mass demonstrations. The
police attacked, and the demonstrators fought back, tearing down symbols
of Soviet domination and HWP rule, sacking the party newspaper's offices
and shouting in favor of free elections, national independence, and the
return of Imre Nagy to power. Gero called out the army, but many
soldiers handed their weapons to the demonstrators and joined the
uprising. Soviet officials in Budapest
summoned Nagy to speak to the crowd, but the violence continued. At
Gero's request, Soviet troops entered Budapest on October 24. The
presence of these troops further enraged the Hungarians, who battled the
troops and state security police. Crowds emptied the prisons, freed
Cardinal Mindszenty, sacked police stations, and summarily hanged some
member of the secret police. The Central Committee named Nagy prime
minister on October 25 and selected a new Politburo and Secretariat; one
day later, Kadar replaced Gero as party first secretary.

Nagy enjoyed vast support. He formed a new government consisting of
both communists and noncommunists, dissolved the state security police,
abolished the one-party system, and promised free elections and an end
to collectivization, all with Kadar's support. But Nagy failed to
harness the popular revolt. Workers' councils threatened a general
strike to back demands for removal of Soviet troops, elimination of
party interference in economic affairs, and renegotiation of economic
treaties with the Soviet Union. On October 30, Nagy called for the
formation of a new democratic, multiparty system. Noncommunist parties
that had been suppressed almost a decade before began to reorganize. A
coalition government emerged that included members of the Independent
Smallholders' Party, Social Democratic Party, National Peasant Party,
and other parties, as well as the HWP. After negotiations, Soviet
officials agreed to remove their troops at the discretion of the
Hungarian government, and Soviet troops began to leave Budapest. Nagy
soon learned, however, that new Soviet armored divisions had crossed
into Hungary.

In response, on November 1 Nagy announced Hungary's decision to
withdraw from the Warsaw
Pact and to declare Hungary neutral. He then appealed
to the United Nations and Western governments for protection of
Hungary's neutrality. The Western powers, which were involved in the
Suez crisis and were without contingency plans to deal with a revolution
in Eastern Europe, did not respond.

The Soviet military responded to Hungarian events with a quick
strike. On November 3, Soviet troops surrounded Budapest and closed the
country's borders. Overnight they entered the capital and occupied the
National Assembly building. Kadar, who had fled to the Soviet Union on
November 2, assembled the Temporary Revolutionary Government of Hungary
on Soviet soil just across the Hungarian border. On November 4, the
formation of the new government was announced in a radiobroadcast. Kadar
returned to Budapest in a Soviet armored car; by then, Nagy had fled to
the Yugoslav embassy, Cardinal Mindszenty had taken refuge in the United
States embassy, Rakosi was safely across the Soviet border, and about
200,000 Hungarians had escaped to the West.

With Soviet support, Kadar struck almost immediately against
participants in the revolution. Over the next five years, about 2,000
individuals were executed and about 25,000 imprisoned. Kadar also
reneged on a guarantee of safe conduct granted to Nagy, who was arrested
on November 23 and deported to Romania. In June 1958, the Hungarian
government announced that Nagy and other government officials who had
played key roles in the revolution had been secretly tried and executed.

Hungary - Kadar's Reforms

The Revolution of 1956 discredited Hungary's Stalinist political and
economic system and sent a clear warning to the leadership that popular
tolerance for its policies had limits, and that if these limits were
exceeded, popular reaction could threaten communist control. In
response, regime leaders decided to formulate economic policies leading
to an improvement of the population's standard of livings. Pragmatism
and reform gradually became the watchwords in economic policy-making,
especially after 1960, and policymakers began relying on economists and
other specialists rather than ideologists in the formation of economic
policies. The result was a series of reforms that modified Hungary's
rigid, centrally planned economy and eventually introduced elements of a
free market, creating a concoction sometimes called "goulash
communism".

In late 1956, the party named a committee of mostly reform-minded
experts to examine Hungary's economic system and make proposals for its
revision. The committee's report marked the first step on Hungary's road
to economic reform. Its proposals presaged many of the changes
implemented a decade later, including elimination of administrative
direction of the economy, introduction of greater enterprise autonomy,
cooperation between private and collective sectors in agriculture,
economic regulation using price and credit policies, and central
planning focused only on long-term objectives. However, the committee's
proposals were never really implemented. Some observers suggested that
the party had solidified its power so quickly that it no longer needed
to enact such drastic measures; others claimed that Soviet leaders
opposed such reform until they ensured that the party (on November 1,
1956, renamed the Hungarian Socialist Workers' Party--HSWP) had
consolidated its power and demonstrated a clear need for a fundamental
economic change. During the chaos of the revolution, Hungary's
collective farms lost about two-thirds of their members. Many left to
become private farmers. In July 1957, Kadar appeased hard-liners in
Hungary and abroad by agreeing to recollectivize agriculture, and in
early 1959 the drive began in earnest. The regime combined force and
economic coercion with persuasion and incentives to drive peasants back
to the collective farms. The government abolished compulsory production
quotas and delivery obligations and substituted voluntary contracts at
good prices. It also permitted profit-sharing schemes and programs to
promote technical innovation. The regime allowed peasants to retain
sizable private plots and ample livestock and to choose between
collective or cooperative farms. The farms also received substantial
government investments. As a result, Hungary became the only country
with a centrally planned economy where crop output increased as a result
of collectivization. By 1962 more than 95 percent of all farmland had
been collectivized either in the form of state farms or cooperatives.
The collectivization drive deflected the hard-liners' criticism of Kadar
for his advocacy of reform, and problems with the program's
implementation, including excessive coercion of the peasants, later
helped Kadar oust the hard-line agriculture minister.

By the early 1960s, Hungary was ripe for a political shakeup .
Khrushchev had consolidated his position in the Kremlin and had begun a
second wave of de-Stalinization, thus leading Kadar to believe that the
Soviet leadership would support political changes in Hungary. Kadar
replaced Ferenc Munnich as prime minister (who had served in that
position since January 28, 1958), and thus assumed the top government
post, as well as the leadership of the HSWP. He then dismissed other
hard-line officials. Kadar's consolidation of power led to a more
flexible, pragmatic atmosphere in which persuasion took on greater
importance than coercion. Kadar relaxed government oppression and
released most of those imprisoned for participating in the revolution.
Soon Hungary became the leader of the reform movement within the Soviet
alliance system. Kadar intended to provide the regime with some
legitimacy and political stability based on solid economic performance.
The Soviet Union demonstrated its support with its decision to withdraw
its advisers to the Hungarian government.

Kadar next sought a modus vivendi with the population, summarizing
the new policy with the slogan "He who is not against us is with
us." As part of this "alliance policy," in 1961 he
denounced the practice of making party membership a prerequisite for
jobs demanding specialization and technical expertise. Kadar sought to
remove opportunists who had joined the party solely for the status and
economic benefits that membership conferred. Rather, Kadar wanted to
open the government and economic enterprises to talented people who were
prepared to cooperate without adhering to party discipline or
compromising their political beliefs.

At the Eighth Party Congress of the HSWP in November 1962, Kadar
supporters replaced Stalinists and incompetent officials in leading
party positions. The congress also called for higher party recruitment
standards, for elimination of political and class considerations in
university admissions, and for allowing nonparty members to compete for
leading public positions. Although the party still had influential
conservative members after 1962, the Eighth Party Congress removed them
from the party's policy-making core. As a result of these changes, by
1963 Kadar had acquired genuine popular support.

Plans for reforming the centrally planned economy steadily took shape
after the Eighth Party Congress. Central Committee secretary Rezso
Nyers, who supported a comprehensive reform rather than continued
piecemeal adjustments to the economic system, took charge of economic
affairs. The regime also appointed committees to prepare reform
proposals. By 1964 the government had identified problems in the
economy, including excessive investment, decreases in output and labor
shortages in agriculture, misuse of inputs, hoarding of materials, and
production of unsalable goods. Since the Treaty of Trianon, Hungary had
depended on foreign trade, and in the early 1960s the government placed
top priority on improving the trade with the West and the Comecon
countries. Despite improving the terms of trade, however, by 1964
Hungary had accumulated a serious trade deficit, and the government
could not slow imports without cutting material supplies and personal
consumption. Officials realized that because Hungary had to boost
exports, it would have to meet the needs, quality standards, and
technological requirements of the world economy.

Hungary - New Economic Mechanism

Khrushchev's ouster in October 1964 failed to weaken Hungary's desire
for reform. Kadar responded to the change in the Kremlin by affirming
that "the political attitude of the HSWP and the government of the
Hungarian People's Republic has not changed one iota, nor will it
change." In December 1964, a Central Committee plenum approved the
basic concept of economic reform and formed a committee to provide
fundamental guidelines.

Economic problems also continued to underscore the need for reform.
Agricultural output fell by 5.5 percent. In addition, the government
increased production quotas, cut wages, and announced price hikes.
Popular discontent rose as a result.

In May 1966, the Central Committee approved a sweeping reform package
known as the New Economic Mechanism (NEM). Although many of its elements
could be phased in during a preparation period, the central features of
the reform could be implemented only with the introduction of a new
price system, which was set for January 1, 1968. With the NEM, the
government sought to overcome the inefficiencies of central planning, to
motivate talented and skilled people to work harder and produce more, to
make Hungary's products competitive in foreign markets, especially in
the West, and, above all, to create the prosperity that would ensure
political stability.

The NEM decentralized decision making and made profit, rather than
plan fulfillment, the enterprises' main goal. Instead of setting plan
targets and allocating supplies, the government was to influence
enterprise activity only through indirect financial, fiscal, and price
instruments known as "economic regulators." The NEM introduced
a profit tax and allowed enterprises to make their own decisions
concerning output, marketing, and sales. Subsidies were eliminated for
most goods except basic raw materials. The government decentralized
allocation of capital and supply and partially decentralized foreign
trade and investment decision making. The economy's focus moved away
from heavy industry to light industry and modernization of the
infrastructure. Finally, agricultural collectives gained the freedom to
make investment decisions. The NEM's initial results were positive. In
the 1968-70 period, plan fulfillment was more successful than in
previous years. The standard of living rose as production and trade
increased. Product variety broadened, sales increased faster than
production, inventory backlogs declined, and the trade balance with both
East and West improved. In practice, however, the reform was not as
sweeping as planned. Enterprises continued to bargain with government
authorities for resources from central funds and sought preferential
treatment. The reform also failed to dismantle the highly concentrated
industrial structure, which was originally established to facilitate
central planning and which inhibited competition under the NEM.

The Kadar regime failed to understand that real economic
decentralization required political reform to resolve conflicts that
naturally arose between different interest groups. The government's
problem was to expand "socialist democracy," that is, to build
a system that would simultaneously resolve conflicts and maintain the
HSWP's political monopoly. In fact, the government attempted some
incremental changes. The courts gained greater independence in
administering justice, and changes were introduced in parliament as
deputies on committees of the National Assembly were instructed to
examine and debate legislation more effectively. A 1966 electoral law
created single-representative constituencies and contained a provision
for elections with multiple candidates. However, the Patriotic People's
Front (PPF) retained control of nominations. Even after a second electoral law in 1970
made it legal for other groups to nominate individuals, few multiple
candidacies actually arose. These minimal changes quickly
encountered resistance from entrenched party officials. The 1968 Soviet
invasion of Czechoslovakia and suppression of the reform program there
had also discouraged the HSWP from pursuing further political changes.
However, Kadar was able to work out a modus vivendi with the Soviet
leadership. The Soviet Union allowed Kadar leeway to implement economic
reforms, develop some economic contacts with the West, and permit
Hungarians to travel abroad as long as Budapest accepted Moscow's
hegemony in Eastern Europe and adhered to Soviet foreign policy
positions.

The Kadar regime gave serious attention to implementing the NEM from
1968 to 1972. In 1971, however, counterreform forces were gathering
strength and calling for the return of central controls. The opposition
arose from government and party bureaucrats and was supported by large
enterprises and some workers. The bureaucrats perceived the NEM as a
threat to their privileged positions. The large enterprises saw their
income drop after the introduction of the NEM and were troubled by
competition for materials and labor from smaller enterprises.
Disaffected workers who were on the payrolls of outdated, inefficient
industries resented the higher incomes earned by workers in more modern
firms. This opposition successfully reversed the reform a few months
after Moscow expressed reservations about the NEM and concern about
"petit bourgeois tendencies" in Hungary.

In November 1972, the Central Committee introduced a package of
extraordinary measures to recentralize part of the economy, but the
regime did not formally abandon the NEM. Fifty large enterprises, which
produced about 50 percent of Hungary's industrial output and 60 percent
of its exports, came under direct ministerial supervision, supported by
special subsidies. New restrictions applied to small enterprises and
agricultural producers. Wages rose, prices came under central control,
and the regime introduced price supports. In the following years, the
government also merged many profitable small firms with large
enterprises.

The 1973 world oil crisis and the subsequent recession in the West
caused a drastic deterioration of Hungary's terms of trade and
strengthened opposition to the reform. Inflation threatened, and
counterreformers argued for protecting the living standard of the
working class from an economic shock in the capitalist world. The
government intervened by raising taxes on successful firms and
increasing government purchases and subsidies. Consumer prices
eventually fell below the level of producer prices, and Hungary accepted
credits from Western banks. Centralized material allocation was
reintroduced. After the oil crisis arose, ideological opposition to the
NEM and to "bourgeois attitudes" arose. A clampdown on
intellectuals began, and Nyers lost his Politburo position in 1974.

By 1978 Hungary's dismal economic performance made it clear even to
the counterreformers in the leadership that a "reform of the
reform" was necessary. Return to central control had only rewarded
inefficiency and stifled innovation and initiative. Enterprises ignored
market signals, and shortages plagued producers. Large amounts were
invested in poorly conceived projects, and a trade deficit accumulated.
Hungary's hard-currency debt reached US$7.5 billion by 1978 and had
jumped to US$9.1 billion by 1980.

In 1978 the government admitted that its attempt to shield Hungary
from world economic conditions could not be continued. Hoping to improve
its trade balance with the West and avoid forced rescheduling of its
debt, the government announced its intention to boost exports. This
policy change marked the beginning of a new wave of reforms. First, the
price system was restructured to bring consumer prices gradually in line
with world market prices and to ease the burden of subsidies on the
state budget. Next, producer prices were reformed to bring about more
rational use of energy and raw materials. Finally, the government
overhauled exchange-rate and foreign-trade regulations.

In 1979 and 1980, the government implemented a number of
institutional reforms. The new reforms abolished branch ministries and
replaced them with a single Ministry of Industry intended to act as a
policy-formulating body without direct authority over enterprises. Large
enterprises were broken up into smaller firms. In 1982 the government
legalized the formation of small private firms, including restaurants,
small shops, and service companies, and it permitted workers to lease
enterprise equipment, use it on their own time, and keep the earnings
from their products. In 1984 the regime introduced new forms of
enterprise management, including supervisory councils that would include
worker-elected representatives. New financial institutions also emerged,
and a 1983 government decree allowed enterprises, cooperatives,
financial institutions, and local governments to issue bonds.

In the early and mid-1980s, Kadar had encouraged a limited amount of
political liberalization. The HSWP maintained its monopoly on political
power, but the norms of democratic centralism were looser than in other
countries of Eastern Europe. County party secretaries acquired the
freedom to make decisions of local importance, including control of
personnel. The government again exhorted delegates of the National
Assembly to scrutinize laws and government policies more critically. In
1983 a new electoral law required a minimum of two candidates for each
national and local constituency in general elections. Trade unions began
to defend workers' interests more energetically. Journalists were urged
to expose low- and mid-level corruption and abuse of power, although
they could not criticize the regime's basic tenets. The leadership also
bolstered economic reforms of the early 1980s with a foreign policy
geared to a greater degree than before on trade with the West, and it
maintained this course during the deterioration of superpower relations
in the early 1980s. Thus, the economic reforms of the late 1960s had
also come to provoke a measure of political reform and changes in
foreign policy. These new departures were inspired in large measure by
Hungarian nationalism, a force that had long encouraged Hungarians to
control their own destiny and to resist the hegemony of their larger,
more powerful neighbors.

CITATION: Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-1999.

Please note: This text comes from the Country Studies Program, formerly the Army Area Handbook Program. The Country Studies Series presents a description and analysis of the historical setting and the social, economic, political, and national security systems and institutions of countries throughout the world.

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